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Axios
2 days ago
- Business
- Axios
Trump's China gamble
President Trump is abandoning — or actively undermining — core pillars of U.S. strategy toward China in pursuit of a legacy-defining trade deal with Xi Jinping. Why it matters: With tax cuts extended, tariff rates set and billions of dollars of investment flowing into the U.S., Trump is now fixated on the largest remaining puzzle piece in his economic agenda. Other flashpoints in the U.S.–China relationship — Taiwan tensions, tech restrictions, anti-Beijing alliances — have taken a back seat to the lucrative promise of a trade deal. Zoom in: Trump's staggering 50% tariffs on India — punishment for buying Russian oil — are threatening to unravel years of calculated U.S. efforts to position New Delhi as a bulwark against China. Trump has accused India of "fueling the Russian War Machine," while China — the world's top importer of Russian oil — has so far escaped similar punishment. India's nationalist Prime Minister Narendra Modi has reacted furiously, freezing plans to purchase arms from the U.S. and canceling a high-level defense visit to Washington, according to Reuters. The intrigue: Modi held phone calls this week with Russian President Vladimir Putin and Brazil's President Luiz Inácio Lula da Silva — potentially signaling deeper alignment between the BRICS bloc of nations, led by China. Modi also plans to visit China later this month for the first time in seven years. The big picture: For Trump, who's guided more by personal diplomacy than strategic planning, bending U.S. policy to land a flashy summit with Xi is a gamble worth taking. AI: The Trump administration reversed its ban on Nvidia selling its H20 AI chips to China last month, alarming Republican hawks who fear that the move will "supercharge the Chinese AI capabilities commercially and militarily." A White House official stressed to Axios that other AI export controls remain in effect. Taiwan: The Trump administration told Taiwanese President Lai Ching-te to cancel a planned stopover in New York this month en route to Latin America, cognizant that the visit would inflame tensions with China. Lai canceled his trip entirely. Alliances: Trump's strained relationship with Modi could result in the cancellation of this year's Quad summit, an Indo-Pacific security dialogue between the U.S., India, Australia and Japan that Trump embraced in his first term. The Pentagon is also reviewing whether to continue AUKUS, a Biden-negotiated defense pact designed to arm Australia with nuclear-powered submarines. TikTok: Trump has defied a bipartisan U.S. law requiring the Chinese-owned app to be sold or banned — a stark reversal from his first term, when his administration led the charge to label TikTok a national security threat. The other side: Trump officials have left the door open to secondary sanctions on China for purchasing Russian oil, while noting that Beijing already faces steep tariffs and has negotiated a 90-day truce with the U.S. "China is a special case because it is — in one country — our largest trading problem and the biggest military threat," Treasury Secretary Scott Bessent told Fox News. "So it's three-dimensional chess with the Chinese, as opposed to other countries, especially our allies ... The Chinese are tough, but we are tougher," he argued. Between the lines: When it comes to rhetoric, Trump has saved his harshest criticism for traditional U.S. allies — including the European Union — while pledging to fight China "in a very friendly fashion." He frequently touts his strong personal relationship with Xi Jinping, and praised China last month for taking "big steps" to curb the flow of fentanyl. Still, the administration has sought to maintain its tough-on-China reputation during trade talks — taking steps this month like prosecuting Chinese nationals for chip smugglin g and publicly pressuring Intel's CEO to resign over his ties to Beijing. White House spokesman Kush Desai told us: "In just 200 short days, President Trump has remade the global trading order, ended the era of economic surrender, and leveled the playing field for America's industries and workers."
The Diplomat
3 days ago
- Business
- The Diplomat
Will US-India Defense Relations be Impacted by India's Trade With Russia?
U.S. President Donald Trump's announcement of an additional 25 percent tariff on India for its purchases of Russian crude oil will raise the total tariff on Indian imports to the United States to 50 percent — among the highest rates imposed by the U.S. India doesn't 'care how many people in Ukraine are being killed by the Russian War Machine,' Trump had said, accusing India of fueling Russia's war on Ukraine. A subsequent White House statement said that India's imports of Russian oil were undermining U.S. efforts to end the war in Ukraine. In India's sharply polarized political landscape, there is very little agreement between Prime Minister Narendra Modi's ruling Bharatiya Janata Party (BJP) and the Congress Party, which leads the opposition in Parliament. But in a rare show of unity on Monday, the two parties stood shoulder-to-shoulder as India's Ministry of External Affairs (MEA) condemned President Donald Trump's repeated criticism of New Delhi for continuing to trade with Moscow. India-U.S. relations have frayed significantly in recent months. Trump's repeated claims of having mediated an end to the India-Pakistan military clashes in May did not go down well in Delhi. The imposition of high tariffs on India has worsened ties further, raising questions over whether this will impact the robust bilateral security partnership and the growing defense trade. U.S. objections to India's oil trade with Russia have raised eyebrows in New Delhi. It was after the start of the war in Ukraine that the U.S. and EU started targeting India for importing oil from Russia. However, the MEA has pointed out that India began importing oil from Russia because traditional supplies were diverted to Europe after the outbreak of the conflict. The U.S. at that time actively encouraged such imports by India for strengthening global energy markets. In its statement on Monday, the MEA said: 'It is revealing that the very nations criticising India are themselves indulging in trade with Russia.' Indeed, in 2024, the EU's bilateral trade in goods with Russia was worth 67.5 billion euros. In 2023, trade in services was estimated at 17.2 billion euros. This was significantly larger than India's total trade with Russia that year or subsequently. India's defense trade with the U.S. is not only worth billions of dollars but also, it is surging. In 2005, India and the U.S. did no defense spending with each other. However, by 2020, U.S.-India defense trade hit $146 billion, and by 2025, it was expected to breach the $200 billion mark. Instead, in early 2025, in a dramatic U-turn, the Trump administration reintroduced aggressive tariffs. India was included in the digital services tax war. Then came new restrictions on semiconductor cooperation. As Washington's policies became more coercive, with tariff threats, sanctions and export bans piling up on India, New Delhi decided early this year to act in accordance with the principles of strategic autonomy. India is no longer willing to depend on President Trump's mood swings. Even as the import of U.S. defense equipment to India was slashed, India re-wrote procurement laws to block U.S. suppliers. In many ways, it was a return of past animosities, dating back to the 1950s. Washington had long supported India's anti-colonial struggles, but with India's independence and the heating up of the Cold War, India's strategic relationship with the U.S. turned bitterly argumentative, if not downright adversarial. In 1954, against the backdrop of the Cold War, the U.S. and six allies co-opted Pakistan into joining the Southeast Asia Treaty Organization (SEATO). While SEATO's stated aim was to prevent communism from gaining ground in the region, its appeal for Pakistan was the military and diplomatic support it received from the U.S. in its struggles against India. In 1959, Cold War geopolitics led the U.S. to support Pakistan as a member of the Central Treaty Organization (CENTO). In 1972, the U.S. used Pakistani cover to send President Richard Nixon to China in a geostrategic coup that altered the course of the Cold War. In 1999, India's nuclear tests evoked outright hostility from Washington as well as sanctions on the supply of defense equipment. Not until the turn of the century did U.S.-India relations take a turn for the better. In 2005, a New Framework Agreement for the U.S.-India Defense Relationship was signed. The Pentagon and India's Ministry of Defense (MoD) concluded the Defense Technology and Trade Initiative (DTTI) to bypass bureaucratic processes and procedures in both administrations. The so-called 123 Agreement opened the doors for civil nuclear cooperation between the two countries. In 2015, U.S. President Barack Obama and Prime Minister Narendra Modi signed a Joint Strategic Vision for the Asia-Pacific and Indian Ocean Region, and in 2016, the U.S. designated India as a Major Defense Partner. In 2018, the bilateral security partnership reached a new level with the inaugural 2+2 Ministerial Dialogue — a cabinet-level meeting between American and Indian defense and foreign policy leaders. In 2018, the U.S. granted India Strategic Trade Authorization, Tier One status, enabling India to access many of America's highly-regulated technology items, including the Predator and Sea Guardian drones that have run into controversy. There is also the vitally important question of which branch or section of the U.S. establishment does an ally or partner country draw support from. It is the answer to this that ultimately determines the staying power of an ally or partner. For example, among the strongest and most influential branches of the U.S. administration are the four military services: the Army, Navy, Air Force, and the Marines. If one of these military services is backing the efforts of a partner country, or an allied service — for example, the Indian Navy — in an effort to obtain from the U.S. a weapon system such as the Sea Guardian drone, the obtainment of support from the U.S. Navy would be of vital help in inducing the U.S. Department of State in clearing the sale. Similarly, the backing of the U.S. Army would be almost essential in obtaining clearance for the sale of, say, Javelin anti-tank guided missiles to the Indian Army. This military-to-military relationship is extremely well-developed in the case of the U.S. military and the Indian military. This leaves us with the important question: Are U.S.-India relations on firm ground? Or will they retain, and be guided by, a disruptive moral component, with Washington continuing to cite its democratic values, love of freedom and the rule of law at inconvenient moments? Eventually, the answer will be affected by three parameters: The depth and strength of the military-to-military cooperation, the quantity of defense sales to India, and the defense-industrial cooperation between the two countries. The impending sale of P8-I Poseidon multi-mission maritime aircraft is likely to be the first test case.
Hindustan Times
4 days ago
- Business
- Hindustan Times
Narendra Modi and Donald Trump go head-to-head
Editor's note: On August 6th Donald Trump announced that the additional tariff he had threatened to impose on Indian goods would be 25%, bringing the total tariff rate to 50%. On August 4th Donald Trump took to Truth Social, his social-media platform, to berate India: because the country's 'massive' oil purchases fund 'the Russian War Machine', he said, it would suffer substantially steeper tariffs than the 25% the president slapped on the country last week. In some ways the president is not wrong: Russia supplied a negligible 0.2% of India's oil imports before the war in Ukraine. Since then, it has become India's biggest supplier, providing between 35% and 40%. But Mr Trump's anger also hints at his worsening relationship with Narendra Modi, India's prime minister. Months-long negotiations between the two countries towards a 'mini-deal' have shaved just a percentage point off the original threat of 26% tariffs on Indian exports to America. The levies, set to hit a week after a fiery executive order dated July 31st, do not yet include the Russia penalty. Previously, Mr Trump has complained about bilateral trade worth $190bn. India had hoped this would be a happy sign of ever closer ties. In Mr Trump's view, though, it is bad news: at almost $46bn, America runs a 'MASSIVE TRADE DEFICIT WITH INDIA!!!' Few in India seem in the mood for compromise. In a defiant public address on August 2nd Mr Modi avoided name-checking the American president but urged economic self-reliance at a time of global uncertainty. Anonymous Indian officials are briefing international media on India's right to Russian oil. America's negotiation team is expected in Delhi, as planned, for the sixth round of talks starting on August 25th. Even so, Ajit Doval, the national security adviser, is due to visit Moscow on August 5th. Subrahmanyam Jaishankar, India's foreign minister, will reportedly follow later this month. This marks a striking change from Mr Trump's first term, when the American president and Indian prime minister filled stadiums from Texas to Gujarat in celebration of a blossoming bond between the two countries. India clinched deals for defence equipment and tech usually reserved for NATO allies and some exemptions from sanctions on its dealings with Russia. A mutual disquiet about China's rise lent the relationship urgency. As a result, India welcomed Mr Trump's comeback. According to a poll in 2024 by the European Council on Foreign Relations, a think-tank, 84% of Indians believed Mr Trump was good news for their own country—the highest among all 24 countries polled. But despite Mr Modi's outwardly friendly reception at the White House in February, one journalist briefed on the visit describes Indian diplomats as 'stunned' by the 'lack of respect' America's president showed India's prime minister behind closed doors. Mr Trump has demanded that India buy more American weapons. He used a military plane to deport illegal Indian migrants in handcuffs. Trade disputes between the two countries in Mr Trump's first term look like 'an early sign of the madness that was to come', concedes one former Indian ambassador. Economic assessments of the fallout from MAGA tariffs are shaky. India's Bank of Baroda thinks they may lop 0.2 percentage-points from the growth rate in the 2026 financial year—though the economy would still expand at around 6.5%. Indian jewellery and textiles would be among the sectors hardest hit, according to India's Axis Bank. Existing tariff exemptions for pharmaceuticals and electronics seem to have survived. As India is the world's largest generic-drugs exporter, this will be a relief. It is also experiencing an electronics-export boom. Trade experts assume that Apple will keep making most of its American-sold iPhones in India. However, companies may be wooed by lower tariffs elsewhere. India's big competitors—such as Indonesia, Malaysia and Vietnam—all ended up facing American tariffs of 19% to 20%. Even India's few reliably pro-American voices are losing faith. Mr Jaishankar, known for his patient decades-long campaign to corral sceptical compatriots into American arms, has mounted no recent defence of Mr Trump. Instead, on August 4th he said that: 'We live in complicated and uncertain times. Our collective desire is to see a fair and representative global order, not one dominated by a few.' A hawkish foreign-policy analyst now uses a term usually reserved for China, saying that India should 'de-risk' from America. Similarly, India's small club of free-market economists has stopped arguing for India to unilaterally lower its tariffs. One foreign-affairs insider describes how, under previous administrations, the view was that 'America cannot be trusted'. Now, she says, India 'will go back to thinking that way'. Stay on top of our India coverage by signing up to Essential India, our free weekly newsletter.
Spectator
4 days ago
- Business
- Spectator
What Putin wants from his meeting with Trump
With just a day to go until the expiry of his ultimatum to Vladimir Putin to halt the war on Ukraine or face dire consequences, Donald Trump has once more reset the clock. Trump intends to meet in person with President Vladimir Putin of Russia as soon as next week, the New York Times has reported. That summit will be followed by a second, trilateral meeting including Trump, Putin and President Volodymyr Zelensky of Ukraine, Trump reportedly told top European leaders in a conference call on Wednesday night. The announcement came after Trump's envoy, real state developer Steve Witkoff, met Putin for three hours of talks at the Kremlin. Trump wrote on social media that he had 'updated some of our European Allies' about the Witkoff talks. 'Everyone agrees this War must come to a close, and we will work towards that in the days and weeks to come.' A week before, Trump had professed himself 'disappointed' with Putin's continuous broken promises and moved up a previous 50-day deadline for the Kremlin to cease fire to just eight days – an ultimatum due to expire this Friday. And just hours before he hinted that he was ready for direct talks with Putin, Trump followed through on a threat to impose secondary sanctions on countries which imported Russian oil. 'India … doesn't care how many people in Ukraine are being killed by the Russian War Machine,' Trump said before announcing a 25 per cent tariff on Indian exports to the US due to begin in 21 days. Whether Trump will now actually impose those tariffs in light of his new plan to open talks with Putin is unclear. Trump, famously, considers himself a master of the art of the deal. He favours high-profile, face-to-face summit meetings with world leaders, whether friend or foe. In 2018 he met Putin in Helsinki for a long meeting that cosplayed the high-stakes summits between Ronald Reagan and Mikhail Gorbachev that laid the groundwork for the end of the Cold War. But no deals resulted from that Trump-Putin summit, despite the fact that Putin was at the time already illegally occupying Crimea and his proxies controlled parts of eastern Ukraine. Instead, the main soundbite was Trump appearing to side with Putin over his own intelligence establishment on the subject of Russian interference in the 2016 US elections. 'No prior president has ever abased himself more abjectly before a tyrant,' wrote the late Republican Senator John McCain, decrying Trump's toadying to Putin as a 'disgraceful performance'. This time, the stakes for a Trump-Putin summit will be much higher. People are dying every day, Russian troops are relentlessly advancing, and Ukraine faces critical shortages of air defence missiles and military manpower. Trump has repeatedly vowed to bring an end to the conflict in Ukraine, and has made several threats to impose devastating sanctions on Moscow's oil and gas clients if Putin does not comply. The pressure will be on for Trump to actually persuade, cajole or force Putin to stop his air and ground offensives in Ukraine. It's significant that Europe will be completely sidelined from the proposed talks. Clearly, Trump expects to present whatever he agrees with Putin to the rest of the world as a fait accompli. But in one important sense, direct talks between Washington and Moscow will break a deadlock. Putin has resisted being seen to bow before US pressure. At the same time, the full-scale sanctions threatened by Trump would wreak chaos on the world economy by removing the 10 per cent of the world's oil supply provided by Russia from markets, sending energy prices spiralling. The result of this standoff has been a near-farcical game where Putin pretended to negotiate while Trump pretended to assemble a formidable battery of imaginary sanctions. That phase of phoney negotiations will soon be over. The next question is what incentive Putin will have to end a war that he believes that he is winning. Russian forces appear to be accelerating their encirclement of the strategic railhead of Pokrovsk in Donbas and are advancing towards Kharkiv. At the same time political unrest in Kyiv is growing, both over Zelensky's disastrously misguided attempt to bring anticorruption agencies under his control as well as the forced conscription of men into Ukraine's severely depleted army. Desertions of Ukrainian troops from the front line are, reportedly, soaring. Head of Ukrainian Military Intelligence General Kyrylo Budanov has warned that the country could face a military collapse this summer. Putin can be forgiven for believing that time is on his side. The stark answer to what Putin wants is that he is not fighting for land but rather is fighting to subordinate Ukraine and, as he sees it, prevent it from becoming a threatening Western proxy. That's importantly different to destroying Ukraine, occupying Ukraine, exterminating all Ukrainians, or other hysterical assessments of the Kremlin's intentions. But Putin has been very clear from the start of hostilities that he will not countenance Ukraine as a member of Nato. He also demands limits on the Ukrainian military and the restoration of rights to Russian language speakers and adherents of the Moscow-loyal party of the Ukrainian Orthodox Church. Most importantly, Putin wants regime change in Kyiv, which means the end of Zelensky – who is already six-and-a-half years into a five-year presidential term. How many of Putin's demands will Trump concede during their face-to-face negotiations? Many Ukrainians will ask what right Trump has to negotiate over their heads – exactly what President Joe Biden vowed never to do? Many Ukrainians fear that they are about to be sold down the river in a great power stitch-up reminiscent of the 1945 Yalta carve-up of post-war Europe. 'The war must end [but] it must be done honestly,' tweeted Zelensky on Wednesday after a conference call with Trump alongside other European leaders. 'We all need a lasting and reliable peace. Russia must end the war that it itself started.' Trump's apparent answer to Europeans' concerns has been to symbolically offer a follow-up trilateral meeting involving himself, Putin and Zelensky to give at least an illusion of Ukrainian participation. That seems to be a recipe for disaster. Putin hates Zelensky for defying him and turning the short, victorious war he planned into a long and bloody quagmire. Zelensky hates Putin for massacring and abusing thousands of his people – as well as for sending murder squads to Kyiv with orders to murder him in the first days of the war. Zelensky and Trump had a cordial meeting in Rome at Pope Francis' funeral – but the bad blood after Zelensky's humiliation in the Oval Office in February persists. Meeting Zelensky would legitimise him as the leader of a sovereign Ukraine, which is anathema to Putin. In short, the meeting is as unlikely as it would be disastrous if it ever happened. The good news is that in calling for direct talks with Putin, Trump has offered a quick route to the end of the war. The bad news is that it's likely to be on Putin's terms.
Saudi Gazette
4 days ago
- Business
- Saudi Gazette
Trump orders India tariff hike to 50% for buying Russian oil
WASHINGTON — US President Donald Trump has issued an executive order hitting India with an additional 25% tariff over its purchases of Russian oil. That will raise the total tariff on Indian imports to the United States to 50% — among the highest rates imposed by the US. The new rate will come into effect in 21 days, so on 27 August, according to the executive order. A response from India's foreign ministry on Wednesday said Delhi had already made clear its stance on imports from Russia, and reiterated that the tariff is "unfair, unjustified and unreasonable". "It is therefore extremely unfortunate that the US should choose to impose additional tariffs on India for actions that several other countries are also taking in their own national interest," the brief statement read. "India will take all actions necessary to protect its national interests," it added. The US president had earlier warned he would raise levies, saying India doesn't "care how many people in Ukraine are being killed by the Russian War Machine". On Wednesday, the White House said in a statement that the "Russian Federation's actions in Ukraine pose an ongoing threat to US national security and foreign policy, necessitating stronger measures to address the national emergency". It said India's imports of Russian oil undermine US efforts to counter Russia's activities in Ukraine. It added that the US will determine which other countries import oil from Russia, and will "recommend further actions to the President as needed". Oil and gas are Russia's biggest exports, and Moscow's biggest customers include China, India and Turkey. Russia is now the biggest seller of oil to India, accounting for more than 35% of India's overall supplies, according to global commodities data platform Kpler. Trade data shared with the Reuters news agency showed that India bought about 1.75 million barrels a day of Russian oil in the first six month of this year. Speaking later at an event in the White House, Trump took a question from the BBC on the subject and said the tariff on India was just the start — "You're going to see a lot more, so much secondary sanctions," he said. The threatened tariff hike follows meetings on Wednesday by Trump's top envoy Steve Witkoff in Moscow, aimed at securing peace between Russia and Ukraine. The additional tariff would mean a steep 50% duty on key Indian exports like textiles, gems and jewellery, auto parts, and seafood, hitting major job-creating sectors. Electronics, including iPhones, and pharma remain exempt for now. Delhi has previously called Trump's threat to raise tariffs over its purchase of oil from Russia "unjustified and unreasonable". In an earlier statement, a spokesperson for India's foreign ministry said the US had encouraged India to import Russian gas at the start of the conflict, "for strengthening global energy markets stability". He said India "began importing from Russia because traditional supplies were diverted to Europe after the outbreak of the conflict". The latest threatened tariff demonstrates Trump's willingness to impose sanctions related to the war in Ukraine even against nations that the US considers to be important allies or trading partners. This could be a warning that other countries could feel a real bite if Trump ramps up those kind of sanctions once Friday's deadline passes, when the US president has threatened new sanctions on Russia and to place 100% tariffs on countries that purchase its oil. This would not be the first time the Trump administration has imposed secondary tariffs, which are also in place to punish buyers of Venezuelan oil. India has previously criticised the US — its largest trading partner — for introducing the levies, when the US itself is still doing trade with Russia. Last year, the US traded goods worth an estimated $3.5bn (£2.6bn) with Russia, despite tough sanctions and tariffs. Trump and Indian Prime Minister Narendra Modi have in the past referred to each other as friends and, during Trump's first term, attended political rallies in each others' countries. But that has not stopped Trump from hitting India with the levies, suggesting diverging interests between New Delhi and Washington. The Federation of India Exports Organisations has called the decision to impose additional tariffs "extremely shocking", adding that it will hit 55% of India's exports to America. The tariffs are expected to make Indian goods far costlier in the US, and could cut US-bound exports by 40–50%, according to the Global Trade Research Initiative (GTRI), a Delhi-based think tank. "India should remain calm, avoid retaliation for at least six months, and recognise that meaningful trade negotiations with the US cannot proceed under threats or mistrust," former Indian trade official and head of GTRI, Ajay Srivastava, said. — BBC
