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By Hugh Cameron
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President Donald Trump's decision to ratchet up tariffs on India, far from teaching New Delhi a lesson, may be nudging it into the embrace of America's foes and strengthening China's geopolitical sway in the Asia-Pacific region.
Trump had originally planned to impose a 25 percent tariff on India's imports—only slightly discounted from the original "reciprocal" rate—after negotiations failed to produce what initially seemed like one of the more surefire trade deals. In early August, however, the administration announced that this would be doubled due to India's "continued purchase of Russian Federation oil."
"India is not only buying massive amounts of Russian Oil, they are then, for much of the Oil purchased, selling it on the Open Market for big profits," the president posted to Truth Social ahead of this hike. "They don't care how many people in Ukraine are being killed by the Russian War Machine."
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The Indian Ministry of External Affairs called the tariff move "unfair, unjustified and unreasonable," while External Affairs Minister Subrahmanyam Jaishankar said it was ironic for a purportedly "pro-business" administration to "accuse other people of doing business."
Newsweek has contacted the White House and India's External Affairs Ministry via email on Wednesday for comment.
Rather than supplicate before the duties took effect this week, the government has given no indication it intends to stop purchasing Russian oil to meet its population's energy needs. Prime Minister Narendra Modi has said that both he and his country are prepared for the challenges ahead, and recently encouraged Indians to adopt a "Swadeshi" mantra of economic self-reliance.
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This is a far cry from the cordial meeting between the two leaders at the White House in February, during which Modi hailed the Trump as "instrumental" for nurturing India-U.S. ties, pledged to "make India great again," and concluded that "MAGA plus MIGA becomes a mega partnership."
With India's access to its principal export market jeopardized, and the world's first- and third-largest economies trading barbs, this fraying relationship could be creating a ripe opportunity, at which Beijing is sure to pounce.
"The emerging tensions between the U.S. and India in many ways is a gift to China," said Wendy Cutler, vice president of the Asia Society Policy Institute and a former trade negotiator for the U.S. government.
"China will use the opportunity to bring India closer into China's economic orbit, advance its positions in South Asia and the Indian Ocean, and neutralize India's regional and global agenda," added Dr. Yun Sun, senior fellow and director of the Stimson Center's China Program.
How China Can Profit From Weakening US-India Ties
In 21st-century discussions over how Washington could blunt Beijing's economic and political reach, India has invariably earned a mention alongside such descriptors as "bulwark," "counterweight" and "indispensable partner." Trump's former U.N. Ambassador Nikki Haley said as much in a recent piece for Newsweek, which argued that sacrificing the decades spent courting New Delhi "would be a strategic disaster."
"Tensions between the U.S. and India are primarily economic for now, but if not addressed [or] remedied immediately could harm other parts of the relationship and end up harming strategic trust between the partners, undoing decades of work by successive U.S. and Indian administrations," Garima Mohan, senior fellow at the German Marshall Fund's Indo-Pacific Program, told Newsweek.
Mohan noted that a key factor driving the two countries together in the past had been their shared understanding of the challenges posed by China, but that this deteriorating relationship could prompt a reassessment of India's priorities.
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The two nations have already shown signs of rapprochement as they grapple with the implications of Trump's tariffs, despite longstanding —and very much current—tensions over issues pertaining to sovereignty. Chinese Foreign Minister Wang Yi's recent visit to India concluded with an agreement on enhanced bilateral trade, the resumption of direct flights following a five-year suspension and further consultations regarding their Himalayan border.
Mohan told Newsweek that the myriad disagreements that still exist between China and India—over the border and China's "increasing influence in India's neighborhood"—will prevent this normalization of ties transforming into a fully fledged "reset" for the relationship.
Sun, similarly, does not expect New Delhi and Beijing to become close allies "simply because [the] U.S. has taken a more negative approach toward India," adding that the country is unlikely to sacrifice its "strategic autonomy," and that there exists "a ceiling as for how far [the] India-China improvement of relations will go."
However, even if geopolitical disagreements do not completely subside, an India weakened by the latest round of tariffs could increase China's economic sway in the region. India's economic rise, and its current capacity to challenge China on manufacturing and trade, was fueled in no small part by U.S. dollars, both in terms of export receipts and foreign direct investment (FDI).
Wendy Cutler told Newsweek that the high tariffs levied on Indian exports "are likely to impact India's ability to attract the same levels of FDI that it has recently enjoyed by companies looking to diversify from China."
The BBC recently reported that a 50 percent tariff on Indian goods could push the prices of Indian apparel in the U.S higher than those made in Bangladesh, Vietnam and even China despite its own staggering duties.
"Given the export overlap between China and India, Chinese firms will gain a competitive advantage compared to their Indian competitors," Wayne Winegarden, an economist with the Pacific Research Institute, told *Newsweek. "*Thus, U.S. reliance on Chinese firms for products including electronics, textiles, and machinery will grow."
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For now, Beijing appears focused on charming New Delhi, while putting on displays of anti-U.S. solidarity among fellow nations of the Global South.
Prime Minister Modi is set to visit China this weekend for the first time since 2018 to take part in the latest meeting of the Shanghai Cooperation Organization (SCO). This summit, which Beijing has said will be the largest since the alliance was founded in 2001, is set to host a number of other world leaders including Russian President Vladimir Putin.
In the same vein as China, experts have observed Russia rolling out its own diplomatic push toward India.
"Putin and other high-ranking Russian officials are spending considerable amounts of time and energy to stabilize and strengthen relationships with India, indicating that Russia views India as a critical source of revenue," the Institute for the Study of War (ISW) wrote in a recent analysis.
"It's no coincidence that in the face of 50 percent tariffs, PM Modi is warming up to Beijing, regardless of their historical divisions," said Wendy Cutler, adding that the world should anticipate more of this "unexpected cooperation emerging between tariff-aggrieved nations."
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