Trump’s tariff strike on India plays into China’s hands

Singapore: When Indian Prime Minister Narendra Modi travels to Shanghai later this month, as leaked reports suggest he will, it will mark the first time in seven years he has met Chinese President Xi Jinping on his home turf.

It will also send an unmistakable signal of the growing detente between Asia’s two heavyweight nuclear powers after a period of escalating tensions and border conflict.

If US President Donald Trump makes good on Wednesday’s vow to double tariffs on Indian exports, Modi would arrive in China for the Shanghai Co-operation Organisation meeting on August 31 with his relationship with Beijing’s chief rival under newfound strain.

At 50 per cent, the tariff would be among the highest the Trump administration has imposed on its trading partners. Half of that figure is in retaliation for India’s purchases of Russian oil. Notably, China, the world’s largest buyer of Russia’s fossil fuels, has so far escaped a similarly punitive measure.

Tightening the screws on Russia by strangling its wartime economy has been a key tool of the United States and its allies to try to force President Vladimir Putin to abandon his ambitions to annex Ukraine.

But Trump’s surprise decision to single out India for punishment – and his confrontational approach to trade negotiations, including disparaging India’s economy as “dead” – is a high-risk gamble that undermines years of US-led efforts to build trust with the country.

On the world stage, India plays a careful hand, wary of being pulled too closely into either China’s or America’s orbit. It is a member of both the Chinese-dominated BRICS forum, which was set up as an alternative to US-led institutions, and the Quad security dialogue with the United States, Australia and Japan.

For more than two decades, the US has courted India as a strategic ally, efforts that have escalated in recent years as America and its friends have increasingly seen India as a counterweight to China’s growing assertiveness in the Indo-Pacific region.

“China would be pleased to see this going on,” says Dr Lavina Lee, an associate professor in security studies at Macquarie University.

“Previous US administrations have been willing to put aside key differences with India – on their defence and economic relationship with Russia, on their ties with Iran, their highly protectionist economy – for the much bigger prize, which was India’s support regarding geostrategic competition with China.”

Trump’s economic assault on India won’t push New Delhi into China’s arms, Lee says. The distrust between India and China runs deep.

But it will wound the US-India relationship, which has until now had been boosted by a personal friendship between Trump and Modi, and in a way that could have significant flow-on effects if left to fester.

It will also sit uncomfortably in Canberra, which has assiduously cultivated its relationship with Modi’s government through the Coalition and Labor eras, seeking common cause in shared democratic world views that contrast with China’s authoritarianism.

It’s unclear how this will affect the Quad leaders’ summit – which India is due to host later this year – the central, unspoken purpose of which is countering China’s economic and military coercion. If it does proceed, this episode paves the way for less than cordial discussions, to say the least.

Trump’s approach to India stands in stark contrast to his conciliatory approach to China in recent months. As India’s trade negotiations with Washington collapsed, China is likely to secure an extension as US trade officials claim a deal is close.

Since Beijing showcased its upper hand in the trade war by withholding rare earth shipments, Trump has made a number of moves that have alarmed Republican China hawks and been widely interpreted as a sign he is looking to smooth passage for a deal with Xi at a yet-to-be-confirmed meeting in China later this year.

These include overturning a recent export ban on Nvidia’s H20 chips to China, reportedly blocking the Taiwanese president’s plans to transit through the US on the way to South America, and cancelling a meeting between US officials and Taiwan’s defence minister in June.

Back in India, Modi’s political rivals have slammed Trump as a “bully” and added to nationalistic public fervour by calling on the prime minister not to back down.

The same sentiment has helped other world leaders bolster their domestic popularity – just ask Prime Minister Anthony Albanese or Canada’s Mark Carney.

But as far as foreign policy goes, it’s a dismal strategy for America’s leadership to be widely disdained by the populations of the countries it wants as allies.

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