Countries are coming together amid rising global tensions, as the United States has enacted a wide-ranging series of new tariffs with rates between 10 percent and 50 percent, targeting imports from around 70 countries.
President Donald Trump has now imposed an additional 25% tariff on Indian goods as a “penalty” for continuing to import Russian crude oil, pledging similar measures against other nations that support Russian President Vladimir Putin’s war on Ukraine. This follows his earlier threat of 100% tariffs unless a peace deal is reached by August 9.
With this new levy, total US duties on Indian imports rise to 50%, 20 points higher than China’s rate and 31 points above Pakistan’s, with the tariff set to take effect in 21 days. This escalating trade dispute, fuelled by Trump’s tariffs and India’s continued reliance on Russian oil, has abruptly ended a recent thaw in US–India relations. In response, New Delhi is seeking new economic and diplomatic partnerships, including with historic rivals such as China, with the upcoming visit of PM Modi to China signalling a shift that could reshape global trade, geopolitics, and South Asia’s role in an emerging multipolar world order.
India's response on tariff
In the face of US tariffs and pressure, India is taking a defiant stance, transforming the trade dispute into an issue of national pride and self-reliance. Prime Minister Narendra Modi has publicly urged for economic self-reliance at a time of global uncertainty. In a speech celebrating the centenary of agricultural scientist M S Swaminathan, Modi asserted, “For us, the interests of our farmers are top priority. India will never compromise on the interests of its farmers, dairy farmers and fishermen. I know I will personally have to pay a heavy price but I am prepared for it.” This statement underscored India's commitment to its farmers and evoked the memory of the green Revolution, which helped India achieve food independence. Defence Minister Rajnath Singh also took a veiled swipe at the US, saying that no power in the world can stop India from becoming a big power and that the country would not be browbeaten by additional tariffs. India swiftly condemned the US action as “unfair, unjustified, and unreasonable.” A government spokesperson emphasised that imports are based on market factors to ensure energy security for 1.4 billion people and called it “extremely unfortunate” that Washington is imposing extra tariffs on India for actions many other countries also take in their national interest.
A US trade delegation is scheduled to visit India on August 25, just days before the additional 25% tariff is set to take effect. The outcome of these talks remains uncertain, as Trump has stated there will be no trade talks until the tariff issue is resolved. India has, however, not closed the door on a possible rapprochement.
A shift in alliances: The unexpected union
Rising tensions between the US and India over trade and energy are pushing New Delhi closer to other global powers, including traditional rivals. The US’s punitive tariffs and tough rhetoric have coincided with a notable shift in American foreign policy, as Washington rebuilds ties with Pakistan, India’s long-standing adversary. A recent
private lunch at the White House between President Trump and Pakistan’s army chief, Field Marshal Asim Munir, alongside Trump’s praise for a new US-Pakistan trade deal, have fuelled concerns that India and the US are on a collision course.
This diplomatic pivot has encouraged India to deepen relationships elsewhere. National Security Adviser Ajit Doval received a warm welcome in Moscow, with External Affairs Minister S Jaishankar expected to follow. Meanwhile, Prime Minister Modi has engaged in discussions with Brazilian President Luiz Inácio Lula da Silva, exploring closer economic integration amid the backdrop of US-imposed tariffs. Modi also reaffirmed India’s “Special and Privileged Strategic Partnership” with Russian President Vladimir Putin, who is expected to visit India later this year.
The Russia-India-China (RIC) grouping, originally established by Russian politician Yevgeny Primakov as a counterbalance to Western alliances, could be revived. Together, these three countries cover 19% of the world’s landmass and represent over 33% of global GDP, making them a potentially powerful troika. Russia’s foreign minister recently hinted at reactivating the dormant group, whose last meeting was in 2020 before the India-China stand-off.
Adding to the strain, Trump has threatened an additional 10% tariff on imports from BRICS countries, including India, accusing them of aligning with “anti-American policies.” This tariff threat follows ongoing US efforts to broker a ceasefire in the Ukraine conflict, with Trump’s envoy Steve Witkoff in Moscow just days before a deadline for Russia to agree to peace or face new sanctions.
Nikki Haley, former US Ambassador to the UN and a prominent Indian-American Republican, criticised Trump’s stance, accusing him of being lenient on China while alienating India, a key ally. On X, she said, “India should not be buying oil from Russia. But China, a major buyer of Russian and Iranian oil, received a 90-day tariff pause. Don’t give China a pass and burn a relationship with a strong ally like India.” Her comments came hours after Trump praised his ties with Chinese President Xi Jinping in a CNBC interview, saying, “We have a very good relationship” and hinting at a possible meeting before year-end, adding, “I think we’ll make a good deal.”
This trade dispute isn’t India’s first challenge with the US under Trump. Despite earlysigns of a strong bond, Trump’s ‘America First’ policies brought tensions, including complaints about India’s trade deficit and threats to tax Apple if it manufactured iPhones in India. Now, tariffs are hitting Indian textile and garment makers hard, putting them at a disadvantage against rivals like Bangladesh and Vietnam.
European retaliation: A unified front?
The trade conflict is not limited to the US and India. European countries are also responding with their own strong words and retaliatory measures. The European Commission has received broad support from its member states to implement a round of tariffs on US goods, with some estimates suggesting that up to €93 billion in American products could be affected. The proposed tariffs could reach as high as 30% on a wide range of goods, from agricultural products like soybeans to industrial goods such as aircraft. Some European countries, such as Germany, have expressed concern over the potential damage to their automotive and manufacturing industries. Meanwhile, the European Union is currently holding off on implementing a set of countermeasures on US steel and aluminum imports to allow for more time to negotiate a trade agreement with the US.
Modi’s China visit aim to reset ties
As US relations with Pakistan deepen and tariffs threaten to impact India’s economy, Prime Minister Narendra Modi is preparing for his first visit to China in over seven years. Modi will attend the Shanghai Cooperation Organisation (SCO) summit in Tianjin, which begins on August 31, highlighting a diplomatic thaw between the two Asian powers.
This visit marks Modi’s first to China since June 2018, following a period of strained ties after a military clash along the disputed Himalayan border in 2020. Earlier this year, Modi and Chinese President Xi Jinping met on the sidelines of the BRICS summit in Russia, initiating talks that eased tensions and opened the door for renewed business cooperation and travel between the countries.
Speaking to Asian Voice, Srikanth Kondapalli, Professor of Chinese Studies at Jawaharlal Nehru University, explained the complexity behind Prime Minister Modi’s upcoming visit to China for the SCO summit. He noted the trip was planned nearly a year ago as part of India’s diplomatic support for China’s SCO chairmanship in exchange for backing India’s BRICS leadership, unrelated to recent tensions or Trump’s tariffs. Kondapalli noted, “This is a multilateral visit, not a bilateral one on border disputes,” and said a brief meeting with President Xi may happen but “no major breakthrough is expected.” He highlighted India’s calls for a “multipolar Asia” and concerns over trade restrictions on rare earth metals affecting companies like Foxconn. On border tensions since the 2020 Galwan clash, he described the situation as “half peace,” with troop disengagement but no full de-escalation, meaning forces remain close enough for escalation. He added, “Until China is more transparent, full normalisation is unlikely.”
On China’s support regarding tariffs, Kondapalli said, “China is not backing India on this issue. Tariffs are a bilateral matter, so any comments from China, even criticism ofTrump, are mostly symbolic and hold little real value.”