Of Friends and Foes

Is Donald Trump an enigma dressed like a red-tie diva? Even as world leaders try to wrap their heads around him, he’s keeping everyone on their toes. He loves and hates hard; his friendships are fleeting, and his hugs feel hollow. And as India rudely found out this week, Trump has no loyalties except to his own agendas that change colours on whim. Much to their consternation, world leaders are also discovering that to fulfill his MAGA (Make America Great Again) vision, Trump is firmly resolved to bring others down.

This week he upped the ante on India and Russia calling them “dead economies” and taking punitive action against India for buying Russian oil. Now with a secondary tariff hike, and a total of 50 per cent tariffs against it, India is facing one of the toughest trade scenarios in recent history. Trump wants to be top dog and if he doesn’t get his way, he is prepared to make the underdog grovel, suffer, and pay. Indian businesses have billions of trade to lose and strong arming Trump at least in the current climate seems improbable. But can an alliance stand up to the Trump storm? Brazilian President Luiz Inacio Lula da Silva has proposed to rally together the BRICS nations (Brazil, Russia, India, China, South Africa). Can there be strength in numbers? And more importantly, can the block take on the might of the American giant?

For now, the Indian Prime Minister Narendra Modi has less than three weeks to dial down the trade confrontation. With the sudden doubling of tariffs, India is the most taxed US trading partner in Asia. The US is India’s biggest export market (USD 86.5 billion) and underscores our heavy reliance on them. PM Modi has vowed to protect Indian interests, specifically that of farmers, livestock rearers, and fisherfolk, and has stated that he’s ready to “pay a very heavy price”. With the US comprising 18 per cent of our export market and 2.2 per cent of GDP (gross domestic product), reports suggest that the “heavy price” would mean a sharp depletion of our GDP between 0.5 per cent and 1 per cent, as well as our economic growth targets. Labour-intensive industries such as textiles, gems and jewellery, auto parts, and seafood will feel more than a pinch, and the ripple effect felt across private investments, a weakening Rupee, job market, H1B visas, and so on.

Is Trump resorting to bullying by singling out India among other nations who also import Russian oil? Yes. But did we truly expect anything better? The face-off from early 2025 had already indicated that Trump was to be an undependable ally. Trump wants Russia to stop the Ukraine war and India is caught in the crossfire. Pressuring Russian President Vladimir Putin can be possible if their oil revenues are diminished. Experts opine that the best case would be that while the ongoing trade talks reach fruition, India is able to reverse the secondary tariff. The Indian leadership and technocrats have sleepless nights ahead as they rethink their strategic ties with all trading partners. Do we give in to Trump’s unfair sanctions or stand firm against him and remain committed to ties with Russia? A bold trade standoff could give rise to a new union of nations to take on Big Brother but are at what cost?

Even as the nation mulls its next steps, it must also immediately and simultaneously work on supporting its exporters through subsidies and sops. Opening up and tapping new markets should be pursued with urgent vigour. Improving our relationship with China, as other nations have also recently undertaken, is also underway, as are trade deals with the European Union (EU). The August 27 deadline, as set by the US, is just days away, and it will prove to be a test both of Indian diplomacy and policy.

The writer is an author and media entrepreneur. Views expressed are personal