The Trump tariff playbook: Sudden, political, unilateral
According to a report in the Politico, a foreign affairs publication, the negotiators from Vietnam believed the trade talks with the US had closed with tariffs at around 11%. Trump unilaterally raised the figure to 20% during a call with Vietnam’s General Secretary.He announced this as a done deal online, despite Vietnam not having agreed to the terms. No official joint statement or documentation followed.
Trump’s stated goal was to bridge the US’ trade deficit with other countries. The US exports to Brazil exceed the imports, but Rio De Janeiro still had to bear tariffs that seem to be motivated more by ideology than economic grounds.
Colombia was threatened with tariffs and sanctions when it initially refused to accept deported nationals from the US. Trump publicly forced the South American nation to allow American flights carrying deportees to avoid trade penalties.
Canada was hit with a 25% tariff imposed under the US’ International Emergency Economic Powers Act in April, which was later increased to 35%, for the country’s alleged role in the US’ fentanyl crisis and illegal immigration.
The move undermined existing trade agreements between the two countries, including one that was signed during Trump’s first term at the White House.
New Zealand, a long-standing ally of the US, faced a surprise tariff hike from 10% to 15%, despite a trade imbalance favouring the US.
Trump has weaponised Japan, Taiwan, and the European Union either to coerce business deals—such as Trump’s demand that TSMC purchase 49% of Intel—or to extract political concessions such as a $600 billion investment pledge from the EU.
BRICS in the crosshairs
Brazil, Russia, India, China, and South Africa, part of the multilateral grouping called BRICS, have each faced unexpected trade actions or rhetorical attacks during their engagement with the US because Trump sees the forum as a potential challenger to the US dollar’s dominance in world trade.
Trump threatened Brazil With to 50% Tariff Unless President Luiz Inacio Lula da Silva stopped the trial of his predecessor, Jair Bolsonaro, an issue that had no relation to the country’s trade negotiations with the US.
South Africa was slapped with a steep 30% tariff. First, Trump amplified a far-right conspiracy theory of “white genocide” in the African country before setting the tariff.
China has been able to use its leverage with rare earth magnets to force a pause on Trump tariffs pending prolonged negotiations between the two sides. Russia continues to face sanctions and geopolitical isolation for its war on Ukraine.
Misinformation about India
Trump’s negotiations with India began with rebalancing tariffs. However, the mutual trust has been marred by the US President’s attempt to distract the negotiations with unilateral proclamations and shifting goalposts.
New Delhi has had to deny Trump’s claims that he forced a ceasefire between India and Pakistan in May, and the latest declaration that India would no longer buy Russian oil, to name a couple of instances.
Trump’s assertions completely ignore the fact that the US had agreed to India importing Russian oil at deep discounts, as that would keep a lid on global oil prices during the war in Ukraine.
A fact that has been corroborated by both Eric Garcetti, the former US Ambassador to India, and Janet Yellen, the former Treasury Secretary in Washington, D.C. India-US Trade Ties: Far From “Dead”
Trump has described India as a “dead economy” and claimed the U.S. does “very little business” with it. Contrary to this, data shows: The U.S. remains India’s largest trading partner for the fourth consecutive year, with bilateral trade at $131.84 billion in FY 2024-25.
India’s exports to the U.S. rose by 11.6% to $86.51 billion from the previous fiscal. Under the “Mission 500” initiative, declared in February this year, both countries had set an aim to double bilateral trade to $500 billion by 2030.
Exaggerated Claims on Diplomacy
Trump has repeatedly claimed to have mediated or influenced a ceasefire between India and Pakistan. He said the situation “would have been a nuclear war within another week,” and that he got it settled through trade leverage.
India has denied these claims. “No world leader had asked India to stop the Operation Sindoor,” Prime Minister Narendra Modi told the Indian Parliament.
“At no stage, in any conversation with the United States, was there any linkage with trade and what was going on,” India’s External Affairs Minister Dr. S. Jaishankar clarified, adding that there was no talk between the Indian Prime Minister and President Trump between April 22 and June 17.
The list of misinformation used by Trump amidst trade talks goes beyond the recent war between India and Pakistan.
Kashmir, Jobs and Climate: Other Misstatements
1. Trump claimed the India-Pakistan conflict over Kashmir has “been going on for a thousand years.” The issuein fact, began in 1947.
2. He claimed PM Modi asked him to mediate on Kashmir in 2019. India’s MEA rejected this, reiterating that all matters with Pakistan are bilateral.
3. Trump said India got a “sweeter deal” under the Paris Accord. However, India became the first G20 nation to meet its Paris climate targets.
4. He blamed India for taking US jobswhereas the fact is that Indian companies have created over 425,000 direct jobs in the U.S., and students contribute $7.7 billion annually to the U.S. economy, according to a report by the Confederation of Indian Industry in 2023.
India’s Position
The broad consensus in India is that Trump has increased tariffs to pressure India into an agreement sooner rather than later.
India has made a lot of concessions already by cutting duties on motorcycles, bourbon, ethernet switches, synthetic flavouring essences, and fish hydrolysate, to name a few.
Tesla has set up shop in Mumbai, even as the negotiations continued, and the equalisation levy on internet giants, widely known as the Google tax, has been withdrawn.
India has also more than doubled its oil purchases from the US in the last six months, according to a source in the Indian government.
However, the red lines for Indian negotiators are well defined. The US’ demand to open up the market for agricultural products and dairy for American giants, at the expense of the Indian farmers, may be a post too far for India.
While India values its relationship with the US, New Delhi’s approach is more likely to be driven by its own national interest. Trump must not mistake India’s complaisance, so far, for American leverage.
