As the president aims to achieve his objectives regarding Russia and trade, an important partnership in Asia may inadvertently suffer the consequences.
President Trump has invested significant political capital in the belief that he can bring an end to the conflict in Ukraine, even claiming he could accomplish it “in 24 hours.” In what could be his most significant risk to date, he announced on Wednesday that he would impose a 50 percent tariff on India for purchasing Russian oil.
The implications involve the relationship between the United States and an increasingly crucial strategic ally in Asia. India, the world's most populous democracy, and the United States, its most powerful one, share a unique relationship. They are amicable yet not closely tied, united by mutual interests and common values, particularly in recent years.
On Wednesday, Mr. Trump appeared willing to abandon that relationship. He raised already substantial tariffs on Indian exports to the United States due to its persistent oil purchases from Russia, aiming to pressure Russia to conclude the conflict. Mr. Trump accused India of aiding Russia in financing its war on Ukraine through its oil imports; however, India contended that it requires affordable oil to satisfy the energy demands of its rapidly growing economy.
India described the increased tariffs as “unfair, unjustified and unreasonable,” highlighting that it was penalized for engaging in an activity—buying discounted Russian oil—that other countries have also pursued, though it did not specify which ones. China is the largest importer of Russian oil, and Turkey has also strengthened its energy ties with Russia since the onset of the war in Ukraine, without facing similar consequences.
Experts indicated that Mr. Trump’s pressure strategies could harm the deep-rooted connection between India and the United States.
“We are better off working together than apart,” stated Atul Keshap, a former U.S. diplomat and president of the U.S.-India Business Council. “The partnership built by our elected leaders over the past quarter-century is worth maintaining and has brought significant mutual benefits and advanced our shared strategic goals.”
It is challenging to determine exactly what the United States would forfeit if its rapport with India deteriorates. India serves as a vital strategic ally for the United States, acting as a counterbalance to China. Furthermore, it holds significance for many American corporations, including Apple, which has relocated some of its manufacturing to India from China.
India, the United States, Japan, and Australia participate in a diplomatic partnership known as the Quad, which was established primarily to address China's increasing influence in the Indo-Pacific area. India is set to host the Quad Leaders’ Summit later this year, and it was anticipated that Mr. Trump would attend, though his participation is now uncertain.
For India, the repercussions of a strained relationship could be more significant. Mr. Trump's actions put Prime Minister Narendra Modi in a difficult position. Russia accounts for 45 percent of India's oil imports. Should India cease purchasing Russian oil, it would face elevated prices for consumers and domestic producers, which could politically damage Mr. Modi’s administration.
Conversely, if India disregards Mr. Trump’s warning and continues its Russian oil purchases, the economic impact on India would be far greater. According to the Global Trade Research Initiative, an Indian research organization, increased tariffs could potentially reduce India's exports to the United States, which exceed $86 billion, by 50 percent. The United States is India's largest trading partner, with exports comprising nearly 20 percent of the Indian economy. In terms of goods, India ranks just 10th among American trade partners.
India has come to appreciate American support for its aspirations to be acknowledged as a global superpower. Mr. Modi has highlighted his friendship with Mr. Trump, actively engaging with the U.S. president during his initial term and referring to him as a “true friend.”
However, that friendship may not hold much weight when Mr. Trump’s personal interests are involved, as many American allies have discovered.
Recently, Mr. Trump declared that he had reached agreements with Japan, Korea, and the European Union; however, despite lengthy discussions, an agreement with India has not been achieved. India has been hesitant to make compromises concerning sensitive political sectors such as dairy and agriculture.
India also publicly refuted Mr. Trump’s repeated assertions that he played a role in facilitating a cease-fire between India and Pakistan following a brief, four-day conflict in May. India has insisted that the cease-fire was established through direct negotiations with Pakistan, and Indian officials expressed frustration at Mr. Trump’s readiness to involve himself in that contentious dispute.
It remains uncertain whether the punitive tariffs Mr. Trump has threatened will actually be implemented. In the executive order he signed on Wednesday, Mr. Trump stated that the tariffs would take effect within a month, though he could alter the order if the situation changes. The order included a clause stating that the United States would assess other countries’ purchases of Russian oil as well.
Currently, there is no sign that Mr. Trump plans to adopt a similar strategy regarding China, which is the largest purchaser of Russian oil. Officials from China and the U.S. are engaged in sensitive discussions about possible trade agreements following an initial round of retaliatory tariffs that threatened to disrupt the global economy.
By imposing tariffs on India, Mr. Trump is focused on significant strategic objectives—a deal with China and maintaining pressure on Russia ahead of a possible meeting with the leaders of Russia and Ukraine, which he mentioned on Wednesday.
Contrary to Mr. Trump’s characterization of it as “a dead economy,” India is actually the fastest growing large economy worldwide. However, its position on the president’s list of priorities may be considerably less assured.
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