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Indian Express
a day ago
- Business
- Indian Express
Ram Madhav writes: Countering Trump's transactionalism
It's not just India — many countries have faced ups and downs in their ties with the US in the past. Even today, the Donald Trump administration is engaged in hardball negotiations with over 20 countries on trade and tariffs. At the root of all this is the sense of 'American exceptionalism' that the US leadership developed after World War II. It built post-War financial institutions in a manner that ensured they helped perpetuate its economic hegemony. Although President Harry Truman claimed 'all countries, including our own, will greatly benefit', the real intention remained US supremacy in the world. The same American businesses realised that despite this weak trade regime, countries like South Korea, Taiwan, Singapore, Japan and Germany emerged as powerful competitors. That prompted them to support the creation of the World Trade Organisation (WTO) in 1995, again with the aim of ensuring better opportunities for Western companies in an increasingly competitive trade space. By then, the developing world had understood the rules of the game and offered stiff resistance. At multiple negotiations in the late 1990s and early 2000s, India led the developing world's campaign for an equitable trade regime. The resistance grew stronger with China's accession to the WTO in 2001, which forced the body to build a regime that helped the developing world as much as it did the developed ones. The WTO regime helped countries like China, India, Indonesia and others register impressive economic growth. China raced ahead in the two decades after it joined the WTO, and India, too, picked up momentum in the past decade and emerged as the most promising economy. The Western powers began feeling insecure and started targeting the rising economies once again. While accusing others of violating WTO rules, they themselves did everything possible to cripple that regime by blocking judicial appointments, violating tariff commitments and not paying membership dues for several years. China became the target after it emerged as the second-largest economy, and soon, it was India's turn. Robert Lighthizer, who was the US Trade Representative under Trump from 2017 to 2021, boasted in 2019 that he got India removed from the Generalised System of Preferences (GSP) regime that allowed developing countries to access US markets easily. Despite regime change, the US didn't restore India to the GSP regime. The Western powers always tried to rig the international trade regime in their favour. They never allowed a real level playing field or free flows of trade and investment. Thomas Friedman's 'the world is flat' was merely a platitude, while the reality was that 'the rise of the rest', to borrow from Fareed Zakaria, was never taken kindly by the West as it believed this was happening at its expense. Jeffrey Sachs, the renowned American economist, warns that the Trump administration's real objective behind tariff aggression is to prevent the Indian economy from growing as a big competitor to the US. India's insistence on strategic autonomy, too, became another sore point for many in the US and EU capitals. As America's influence declined vis-à-vis countries like China and Russia, India was increasingly seen as an important partner. India's refusal to become a party to power-bloc politics irritated many. The current tariff tussle should be seen in this context. There can be other, more 'Trumpian' reasons, too, like Prime Minister Narendra Modi's refusal to stop over in DC after the G7 summit in Canada or the Indian establishment's consistent refusal to accept Trump's claims of having mediated during Operation Sindoor. Trump sees himself as a serious contender for the Nobel Peace Prize. In the past six months, his regime claimed the President had negotiated six peace deals — a record one-a-month success — which included the India-Pakistan, Thailand-Cambodia and Israel-Iran ceasefires, as well as the resolution of other disputes between Serbia and Kosovo, Rwanda and Congo, and Egypt and Ethiopia. He has invited the leaders of Azerbaijan and Armenia to sign a truce next week. Several of these countries, including Pakistan, Cambodia and Israel, and some lawmakers in the US, have already submitted his nomination for the coveted prize. Trump's transactional approach is an extension of America's trade exceptionalism, which needs to be tackled not with aggression in turn but with calm and tact, as Europe and others are doing. The Indian leadership, too, is maintaining a studied silence while working to ensure that normalcy returns sooner rather than later. Trump's targeting of several countries is rooted in his threefold mission — resolve the Ukraine-Russia conflict, secure a Nobel Peace Prize, and Make America Great Again to contain China. He understands that India is an indispensable ally in achieving all three. For India, these Trumpian dreams can be turned into an opportunity. Trump holds PM Modi in great awe and respect. Having made clear that India won't compromise on national interests, the question for the country's leadership is whether long-term discord between the world's most influential democracies, which have grown closer over several decades of strenuous efforts, is a good sign for posterity. If not, the two leaders are just a phone call or an emissary away. The writer, president, India Foundation, is with the BJP. Views are personal
Business Recorder
a day ago
- Business
- Business Recorder
US trade diplomacy
Pakistan, under the 'euphoria of triumph', swiftly walked out, having made a deal with the United States with 19 percent US tariffs on its exports. This drew comparison with India — still embroiled in tariff conflict with US with no settlement in sight. Nevertheless, the comparison is not realistic. India got on the wrong side of Donald Trump who reprimanded it for supplying cheaper procured Russian oil to Europe at a high premium, thereby fuelling the Ukraine war. Additionally, India's engagement with BRICS, as its founding member, is looked upon with suspicion by the Trump administration. Whereas, historically, India's case stems from longstanding trade tensions: data localization rules, price caps on pharmaceuticals, and high tariffs on US imports — specially on its automotive industry. Pakistan, in contrast, has no such baggage. It does not restrict American tech firms, nor does it block market access. The flat 19 percent US tariffs are being quietly absorbed by Pakistan's export sector but should not be overlooked by policymakers. While this is a reduction from the earlier proposed 29 percent tariffs — ironically for Pakistan's struggling exporters, the difference between 19 percent and 29 percent is merely academic when compared to the 0-8 percent range they previously operated under — especially for core products like textiles, surgical goods, and sports equipment. The country's exporters, particularly small and medium enterprises (SMEs), operate on razor-thin margins. With rising energy costs at home and political instability feeding currency volatility and a country fighting for every export dollar, this is not an encouraging development. These blanket tariffs erode Pakistan's competitiveness, particularly in labour-intensive and price-sensitive sectors such as textiles, surgical instruments, sports goods, and leather products. These sectors are economic engines and critical to employment, particularly in vulnerable regions across Punjab, KP, and Sindh. Pakistan uncompetitiveness could reroute US buyers toward countries like Bangladesh, Jordan, Vietnam, or even Mexico, many of whom enjoy more favourable trade terms through Free Trade Agreements (FTAs) or GSP+ schemes. To preserve a healthy trade relationship and support Pakistan's economic stability, an optimal and friendly tariff would fall between 0 percent and 5 percent, at least for priority export categories like textiles and garments, surgical instruments and medical devices, sports goods, leather products and IT services (via digital trade facilitation). This would mirror the preferential access already offered to other developing or strategic allies. The US has mechanisms for this — whether through restoring GSP benefits, or negotiating product-specific concessions under bilateral economic frameworks. Pakistan has long been a strategic ally during the Cold War and the war on terror; more recently, the countries have made efforts aimed at obtaining regional stabilization. That alliance should be reflected in trade policy, not just security dialogue. This 19 percent tariff may seem like a routine trade adjustment, but its implications are far-reaching at a time when Pakistan's economy can least afford it. Political goodwill, unless translated into economic terms, quickly turns into irrelevance. It is now a time for proactive trade diplomacy. Copyright Business Recorder, 2025
News18
2 days ago
- Business
- News18
Not until we get it resolved: Trump on trade negotiations with India
New York/Washington, Aug 8 (PTI) US President Donald Trump has ruled out the possibility of trade negotiations with India, until the issue of tariffs is resolved. 'No, not until we get it resolved," Trump said in the Oval Office in response to a question on whether he expects increased trade negotiations with India since he has announced 50 per cent tariffs on the country. Last week, Trump had announced 25 per cent reciprocal tariffs on India that came into effect from August 7. The US president also signed an executive order slapping an additional 25 per cent levy on India for New Delhi's purchases of Russian oil, bringing the total duties to 50 per cent, among the highest imposed by the US on any country in the world. The additional 25 per cent duty will come into effect after 21 days or August 27. Responding to the tariffs, the Ministry of External Affairs has said that the targeting of India is 'unjustified and unreasonable". 'Like any major economy, India will take all necessary measures to safeguard its national interests and economic security," it said. On the current situation between India and the US, prominent Indian-American attorney Ravi Batra said 'much more is at stake" amid Trump's tariffs. He described as 'unfortunate" that Russian President Vladimir Putin did not accept a ceasefire with Ukraine as wanted by Trump. 'Hurting India is to hurt Russia," Batra said in a post on X. 'But it hurts us too, much more," he said adding that America needs the Russian president to enter into a 'genuine" ceasefire with Ukraine, 'free-of-deception by any, and then get President Xi (Jinping of China) and Prime Minister (Narendra) Modi to be American allies too, along with Putin." 'It's time for a mature reset, or we risk a domino effect that hurts all and unravels multilateralism and gives us unbridled chaos that even creative Wall Street and Federal Reserve can't handle," he said. PTI YAS GSP GSP view comments First Published: August 08, 2025, 09:00 IST Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
Indian Express
2 days ago
- Business
- Indian Express
Best of Both Sides: Bargain with the US on tariffs is still possible
India has finally come into the crosshairs of the Trump storm, having lived a reasonably charmed life in the initial weeks of his presidency. The magnitude of Donald Trump's additional 25 per cent tariff, taking the total to 50 per cent, goes beyond the narrow confines of bilateral trade and economics. It has political ramifications, meant to hurt India. When we look back, India was quick off the mark to engage with Trump 2.0, with visits by the External Affairs Minister for the inauguration ceremony and then by Prime Minister Narendra Modi himself within a month of Trump taking office. Behind the scenes, India was also quick to present a forward-looking trade package to American negotiators, having drawn lessons from his last term when Trump withdrew the Generalised System of Preferences (GSP) for India. Geopolitically, India welcomed the US President's intention to end the Ukraine conflict. It viewed the announcement of tariffs on China as a much-needed correction to Western indulgence of China. The personal chemistry between PM Modi and President Trump was taken as an accepted fact. Things seemed to be going well. Admittedly, there was foreboding of tough times on trade and tariff matters. The pejorative references to India were becoming uncomfortably frequent and strident, and the memories of difficult negotiations under Trump 1.0 never went away. Yet, India escaped Trump's notice as he set about turning against US allies, striking at the foundations of the trans-Atlantic alliance, challenging Canada's sovereignty, not to forget renaming the Panama Canal and the proposal to buy Greenland. The vocabulary and mood of the India-US relationship has changed. The romanticism of shared values is no longer visible. It has now boiled down to teaching a lesson and meting out punishment at the leadership level. We are told that the President is a man in a hurry, and is counting his time, not in weeks but days. The relationship has been dealt a severe blow, the likes of which has not been seen in recent memory. India has been stigmatised for allegedly funding Russia's war effort, in addition to being called the 'tariff king'. Passing the blame for lack of progress in Eastern Europe on India or believing that punishing Delhi will bring Moscow to the negotiating table is obfuscation. Russia's war machine is funded not by India. It is built on the billions of dollars of earnings from energy exports to Europe over decades, besides ongoing imports. The war machine will continue even if India were to bring its imports to zero. It is a well-advertised fact that top US and Russian negotiators were, till a few months ago, discussing potential US investments, trade and economic cooperation with Russia. A better attempt to enfeeble Russia would be to squeeze Beijing. Painting India and China with the same brush is a geopolitical self-goal. Moscow and Beijing are happy to see the US doubling down on India. India is not going to fall, but questions which were considered settled on the durability of friendship with the US have resurfaced. Some in the West and the US project India's purchase of oil from Russia as an exhibition of its pursuit of 'strategic autonomy'. Nothing could be more inaccurate. India has justified its energy trade with Russia ad nauseum. There is a bigger concern at play. If this is an era where transactionalism and unilateralism form the basis of foreign policy and there are no taboos, why should India not brace for a scenario of the US striking a deal with China, or even a breakthrough in US-Russia relations? It is the existence of such uncertainties that strengthens, rather than weakens, the Indian impulse towards geopolitical hedging. The surreal hosting of the Pakistani army chief in the White House and other encomiums heaped on Pakistan, turning a deliberate blind eye to its sponsorship of terrorism in India with Chinese backing, make such hedging more imperative. There is more to the tariff war launched against India than frustration with Russia. Other sources of anger seem to stem from India's non-committal posture on buying certain high-value defence platforms, and the denial of any mediatory role played by the US during Operation Sindoor. There is frustration on Indian bargaining hard on agriculture and dairy imports on the trade track. Added to this are accusations relating to Indian immigration practices, cut back in visas, and people-to-people movement, considered a foundational element of the relationship. Several pressure points are being applied. The India-US relationship is being tested to its limits. It will get worse before it gets better. For Indians, this is a useful reality check. National security and economic growth cannot be outsourced. India is far from being a rejectionist state, but its interests are real, not imagined. The tariffs imposed could lead to the outpricing of Indian goods, services and human resources from the US market; to a possible unravelling and dismantling of the connectivities built over the last few decades. How should India respond to the US President's onslaught? To begin with, keep calm, avoid raising decibel levels, and control the damage. There is a need to focus on internal reform and rebalancing. The India-US relationship is too important to be derailed. The two countries have had a history of talking straight to each other, which has seen them through seemingly unbridgeable positions in the past. Red lines cannot be shifted, but grand bargains are always possible. The past seven months of the Trump era have been marked by volatility and sharp turns. The next few months are likely to be much the same, because much of what Trump is doing is still work in progress. The writer is convenor, NatStrat, former deputy national security adviser and former ambassador to Russia
India Today
3 days ago
- Business
- India Today
From ally to ‘dead economy': Timeline of Trump's tariff turn on India
US President Donald Trump and Prime Minister Narendra Modi shared the stage like old friends, exchanging warm words and mutual praise that seemed to cement a partnership for the ages at the Howdy Modi event in September 2019 in Houston. "I'm so thrilled to be here in Texas with one of America's greatest, most devoted and most loyal friends, Prime Minister Modi of India," Trump told the cheering crowd. PM Modi returned the sentiment, calling Trump his "true friend in the White House" and praising him as "warm, friendly, accessible, energetic and full of wit".advertisementFast-forward to August 2025, and that friendship lies in tatters. Trump has imposed 50% tariff on Indian goods, called India's economy "dead," and dismissed the world's fastest-growing major economy with unprecedented harshness. SEEDS OF DISCORD The trouble began long before the Houston lovefest between the two nations. In February 2018, Trump first publicly complained about India's high import tariffs on Harley-Davidson motorcycles, calling them "unfair". India was charging up to 100% tariffs on imported motorcycles while the US imposed "zero tax" on Indian bikes. By March 2018, Trump had imposed 25% tariffs on Indian steel and aluminum as part of his broader trade agenda. Then came the bigger blow: in March 2019, he announced the end of India's Generalised System of Preferences (GSP) benefits. But it was in October 2019, just weeks after their Houston embrace, that Trump first used the phrase that would define his view of India for years to come. He labelled India the "tariff king," a title that stuck. The man who had praised PM Modi as a great friend was now painting India as a trade abuser with some of the world's highest tariff THAT WASN'TDespite the growing trade tensions, Trump and PM Modi continued their public friendship. The breaking point came during Trump's second term. After PM Modi visited Washington in February 2025, both sides appeared optimistic about reaching a comprehensive trade deal. They set an ambitious target of doubling bilateral trade to $500 billion by rounds of intensive negotiations followed between March and July 2025, with Indian officials growing so confident they signaled to media that tariffs could be capped at just 15%.On July 30, 2025, instead of announcing the expected trade deal, Trump imposed 25% tariffs on Indian goods. His social media post was blunt: "India's tariffs are far too high, among the highest in the world, and they have the most strenuous and obnoxious non-monetary trade barriers of any country"The very next day, Trump's rhetoric turned vicious. "I don't care what India does with Russia," he posted on social media. "They can take their dead economies down together for all I care". The word "dead" was particularly stinging, India has been the world's fastest-growing major economy, expanding at over 6% annually even as other economies embrace of Pakistan was also shocking. On the same day he announced tariffs on India, Trump announced a trade deal with Pakistan, praising their cooperation and suggesting Pakistan might even sell oil to India someday. For India, which has fought multiple wars with Pakistan, and the recent heinous attack in Pahalgam, this was diplomatic salt in fresh 50,000 CHEERS TO 50% TARIFFadvertisementTrump signed an executive order imposing an additional 25% tariff on Indian goods, bringing the total to 50% on August 6, 2025. This puts India among the most heavily tariffed nations in US history, facing duties higher than even China during the peak of their trade contrast with Houston couldn't be starker. Where once 50,000 people cheered Trump and PM Modi together, now 50% tariffs threaten to devastate Indian exporters. From textiles to gems, from pharmaceuticals to auto parts, Indian businesses face an uncertain future in the American experts call it the worst crisis in US-India relations in two decades. What began with complaints about Harley-Davidson motorcycles has evolved into a full-scale economic confrontation that threatens the broader strategic partnership built over MODI's STERN RESPONSEIndia would put its interests first, even if that means paying a heavy price, Prime Minister Narendra Modi said on Thursday in remarks seen as a direct response to US President Donald Trump, who slapped a 50 per cent tariff on India for its continued purchases of Russian at the MS Swaminathan Centenary International Conference, PM Modi made it clear that he would continue to stand by the country's farmers and bear the brunt of America's steepest tariffs. "For us, the interest of our farmers is our top priority," the PM said. "India will never compromise on the interests of farmers, fishermen and dairy farmers."Rahul Ahluwalia, Founder-Director of the Foundation for Economic Development, said, "We export around $90 billion of merchandise to the USA. This additional tariff rate represents a substantial threat to many labour-intensive industries. Our response should consider that lowering trade barriers is in our interests.""We should view this as an opportunity to carry out long-needed reforms in different sectors, for eg shifting farmer welfare to DBTs instead of subsidies in electricity and fertilisers which have devastated our ecosystem and forced farmers to stick to low-value crops. This will cause some short-term disruption, but is in our national interest in the medium and long term," he added. - EndsMust Watch
