Go for wool and get out. That would be a good phrase to summarize how the point of view of the Prime Minister of India, Narendra Modi, has changed since he visited the White House in February until this week. Donald Trump had not yet turned a month since he swore his position as president of the United States and his Indian counterpart had already sat with him in Washington.
That February 13, Modi met with the American president to, among other things, try to put the tariff plans that the new administration was preparing against dozens of countries around the world, including India. Given the possible arrival of a new commercial war opened by the Republican leader, the Indian leader proposed a “mega association for prosperity“.
But everything has changed in a matter of six months, going from replicating Trump’s famous phrase for India, “Make India Great Again“To have to pay 50% in tariffs for the products that export to the United States.” In the language of the United States, it is ‘Make India Great Again’: crumb. When the United States and India work together, this more crumb becomes a ‘mega association for prosperity’“Trump’s stunned smile.
Since his visit to the White House, relationships have been stressing. Modi agreed with the US administration for a defense association for 10 years and promised to increase the purchase of US oil and gas. But its commercial ties with Russia have not liked Washington and, while it comes to achieving a peace agreement in Ukraine, its “Great friend“, Trump has decided to declare an economic war.
Narendra Modi and Donald Trump’s press conference last February.
Blanca Casa, IMOBO CASE
No one could suspect that the February meeting between the two leaders was going to take such a great turn. He was one of the first international leaders to meet him after swearing his position. They were close and seemed that India would be one of the countries less affected by the tariff policy of the United States.
As collected The New York Timesthe different presidents who have passed through the White House in the last quarter of a century have always tried to take care of their relations with the Asian country, keeping it as a geopolitical and strategic ally against China. Precisely, the fear of a strong commercial war with Beijing, invited many large North American companies to start business in India.
It seemed that both countries could go hand in hand, until everything fell for their weight. Trump took war for his hand and, from the photos and tights of February in Washington, he has imposed.
India is one of the main importers of Russian oil, only behind China, and that has been tensioning relations until New Delhi has financed the Kremlin in their war against Ukraine.
After negotiations that have lasted several months and have not advanced as Trump wanted, the US president announced on July 30 that all these products from India would be taxed with a 25% tariff for a “mass commercial deficit.” “They have always bought the vast majority of their military team from Russia And they are the largest energy buyer in Russia, along with China, “he said in Truth Social.
A day later, the Republican leader justified that his country had done “very few businesses with India, his rates are very high, of the highest in the world.” “In the case of Russia, the United States has practically no business with them. We are going to keep it that way,” he explained.
25% to 50%
But Trump did not hesitate to raise the commitment to his commercial war against India and did so with an increase in tariffs, from 25% to 50%, for purchase “directly or indirectly” Russian oil. An action that carried out days after Indian officials affirmed that the Russian supply would not stop buying despite threats.
The US president signed an executive order at the beginning of August to apply the tax that has entered into force on Wednesday. He accused New Delhi of financing the war in Ukraine: “They don’t care how many people in Ukraine They are being killed by Russian war machinery“He said.
“In my opinion, the imposition of tariffs, as described below, in addition to maintaining The other measures adopted to address the national emergency, will allow to address this emergency more effectively“He said in the document.
The government of India soon described these measures as “unfair, unjustified and unreasonable” and crossed out “extremely unfortunate“Washington’s decision.” We have made clear our position on these issues, including that our imports are based on market factors and are carried out with the general objective of guarantee the energy security of 1.4 billion inhabitants of India“The Foreign Ministry reasoned in a statement.
On the possible effects of these tariffs, Witold Bahrke, senior macroeconomics strategist and assignment of assets in Global Evolution, part of Generali Investments, explains that “the triangulation between India, Russia and Europe would be a more serious problem in India that in other countries importing Russian oil. ”
“This constitutes one of the main reasons why Trump has downloaded his anger in India and not so much in other oil importers (The other reason are the high tariffs to India), “he details.
Despite the imposition of the new tariff, it emphasizes that there are still options that this additional 25% tax can be negotiated “down” after meetings that may occur with Indian representatives in the next few days. “The United States cannot afford to risk losing India as an ally and as a counterweight to China in the Asian region. At the moment of truth, India has a clear incentive to replace Russian oil in order to avoid additional tariffs, since the value of its exports to the US exceeds the discount that obtains on Russian oil, “he says.
The United States cannot afford to risk losing India as an ally and as a counterweight to China in the Asian region
If Trump has demonstrated in the more than seven months of second mandate, it can change their opinion and an opinion in a matter of minutes. It has passed in half a year since Narendra Modi shone and agreed to cement its relations, but its commercial warfare and against everything- it seems that it has done nothing more than start. Now, the ball is on the roof of the modi. Will you give in to your “great friend” Trump? Will you continue with your commercial ties with Vladimir Putin?
