The US's Shift in Trade Policy: From China to India
The US president has shifted his trade policy focus from China to India, significantly increasing tariffs on Indian goods.
Tariffs and Trade Surplus
- The tariff on Chinese goods decreased from 245% to 30% in three months.
- A new executive order will double tariffs on Indian goods to 50% by August 28.
- India's trade surplus with the US was $49.5 billion in 2024, about one-sixth of China's surplus.
India's Challenges and Responses
- India's stance on trade, Russian oil purchases, and Trump's peace claims regarding India-Pakistan are key tension points.
- India must navigate US's expectations without compromising strategic autonomy.
Potential Strategic Moves
- BRICS countries, led by Brazil, are considering a joint approach to counter the US's tariff policies.
- China may secure favorable terms due to its control over rare earth resources critical to the US defense industry.
Energy and Agriculture Considerations
- India's oil industry has adapted to Russian crude, making any shift politically and commercially challenging.
- India is resisting pressure to purchase US agriculture products, prioritizing local farmer interests.
- Potentially importing premium products could open new markets without affecting local farmers.
Strategic Autonomy and Geopolitical Dynamics
- India aims to maintain strategic autonomy amidst US-China tensions and complex international relations.
- Historical context suggests that border tensions with China often coincide with US-China diplomatic efforts.
