Trump’s tariffs on India: Trade war or negotiation tactic?

US President Donald Trump has once again made headlines in India with his aggressive stance on trade and immigration. In his latest speech to Congress, Trump announced reciprocal tariffs on Indian imports, reignited immigration debates, and declared, "America is back."

His statements have triggered fierce Democratic opposition, with lawmakers staging protests and walkouts.

In an exclusive interview with The Federal, senior journalist Sridhar Krishnaswami, who covered North America for years, analysed Trump’s policies and their far-reaching implications.

America first or political strategy?

Trump’s recent address reinforced his long-standing rhetoric of prioritising America’s economic and trade interests. According to Krishnaswami, Trump’s speech was primarily targetted at his "Make America Great Again" (MAGA) supporters, a right-wing faction that remains central to his base.

"Trump has been making the same claims for over a year," Krishnaswami said. "His goal is to project Biden’s administration as clueless on foreign policy, trade, and immigration while portraying himself as the leader who will restore American dominance."

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The speech was filled with criticisms of the Biden administration, particularly regarding its handling of US borders and trade policies. Trump reiterated that his administration would implement tougher immigration policies and impose stricter trade regulations to protect American jobs.

Reciprocal tariffs and a brewing trade war

One of the most contentious elements of Trump’s speech was his announcement of reciprocal tariffs on countries like India, China, Canada, and Mexico. While presenting this as a measure to ensure fairness in global trade, the move has already triggered backlash from trading partners.

"Trump’s logic is simple: You slap me with 10 per cent, I slap you with 10 per cent. You give me 100, I give you 100," Krishnaswami explained. "But the problem is that tariffs and trade wars ultimately hurt American consumers the most."

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Trump’s rhetoric singled out India, particularly targetting automobile tariffs. His long-standing fixation with Harley-Davidson motorcycles, which were once heavily taxed in India, resurfaced as an example of trade imbalance. However, analysts argue that such measures could lead to retaliatory tariffs from other countries, escalating tensions further.

Impact on the US economy

Krishnaswami highlighted that the immediate effect of these tariffs is evident in the New York money markets, which have reacted with volatility. If countries like Mexico and Canada respond with their own counter-tariffs, it could spiral into an economic slowdown.

"Trade wars always have consequences," Krishnaswami warned. "They lead to inflation, supply chain disruptions, and market instability. While Trump sells it as a way to protect American jobs, in reality, it burdens the American consumer."

Wake-up call for India

While the tariffs have raised concerns, Krishnaswami does not believe US-India relations will take a drastic hit. He pointed out that India’s Commerce Minister Piyush Goyal was recently in the US, likely laying the groundwork for a future trade deal.

"Trump understands the importance of India-US ties," he said. "But this is a wake-up call for India. Trump is not bluffing - he expects serious negotiations."

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Trump has set April 2 as the date for implementing his tariffs, humorously stating that April 1 was avoided to prevent confusion with April Fool’s Day. However, Krishnaswami noted that this timeline is flexible, as Trump could easily reverse his stance based on further negotiations.

Dangerous precedent

Trump’s tariff policy could set a dangerous precedent for protectionist measures worldwide. China has already announced that it will take the US to the World Trade Organisation (WTO) over these tariffs. In response, China has imposed duties on American agricultural products, which could hurt US farmers.

"Every country reacts," Krishnaswami explained. "You impose tariffs, they impose tariffs. Before you know it, the world is caught up in a full-scale trade war."

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Given that the US is the largest global economy, its trade policies affect over 150 countries, many of which rely on American imports and exports. If this conflict is not managed properly, it could create economic instability worldwide.

Democrats need a strong leader

Trump’s speech was met with strong resistance from Democrats, with several lawmakers walking out and some holding protest signs. Representative Al Green was even removed from the chamber for disrupting proceedings. Meanwhile, Republican lawmakers overwhelmingly backed Trump, reflecting the deepening divide in US politics.

Krishnaswami emphasised that the polarisation in US Congress has reached an all-time high.

"America is more divided than ever," he said. "The Democrats need to regroup and find a strong leader, because right now, they seem lost. Simply walking out of Trump’s speech is not a strategy."

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One of the most striking observations from Krishnaswami was that some Democratic strategists have suggested that the party should "do nothing" - believing that Trump’s policies will eventually self-destruct.

"But Democrats cannot afford to sit back," he said. "They need a clear message and a leader who can take on Trump."

Turbulent period ahead

With elections looming and Trump actively campaigning, his economic and immigration policies will remain a focal point of global discussion. His tough stance on trade, particularly with India and China, signals a turbulent period ahead in international relations.

As Krishnaswami summed up: "The coming months will define whether Trump’s policies will strengthen America or trigger economic chaos. Either way, the world is watching."

(The content above has been generated using a fine-tuned AI model. To ensure accuracy, quality, and editorial integrity, we employ a Human-In-The-Loop (HITL) process. While AI assists in creating the initial draft, our experienced editorial team carefully reviews, edits, and refines the content before publication. At The Federal, we combine the efficiency of AI with the expertise of human editors to deliver reliable and insightful journalism.)