International Economy and Development

31 July 2025, NIICE Commentary 11514 Sunil Kumar Chaudhary The world of international trade is a high-stakes driver of economic relations among the nations. The latest moves by the US have left observers wondering if they are witnessing a masterstroke or a miscalculation. The imposition of a 25% tariff on Indian goods, coupled with an unspecified “penalty” for India’s ongoing trade with Russia, has sent shockwaves through both economies. Is this an effort to rebalance a perceived unfair trade relationship, or is it a calculated power play designed to bend India to America’s will? The answer, it seems, is a complex mix of both. The official justification for the tariffs is familiar, echoing a rhetoric that has defined US trade policy for some time. The President cited India’s “far too high” tariffs and “strenuous and obnoxious non-monetary trade barriers.” He pointed to the goods trade deficit, which reached an estimated $45.7 billion in 2024, as evidence of an unbalanced relationship that needs to be remedied. From this perspective, the tariffs are a straightforward policy tool - a stick to be wielded to force a more reciprocal trade agreement. The goal is to open up India’s vast and growing market for American products, particularly in politically sensitive sectors like agriculture and dairy, where India’s protective policies have long been a source of frustration for Washington. The tariffs are a blunt instrument, and their application to a country like India, which the US has long courted as a strategic partner, suggests a deeper, more geopolitical motivation. The inclusion of a penalty for India’s trade with Russia is a particularly telling detail. This is an explicit attempt to use economic leverage to influence India’s independent foreign policy. India has maintained a delicate balance in its relationships with global powers, and its ties to Russia. Russia is a major supplier of defense equipment and, more recently, discounted energy, which are a cornerstone of this approach. By linking tariffs to these ties, the US is essentially saying: “Choose us or face the consequences.” This is where the argument of a “policy blunder” comes into play. The US, in its desire to punish Russia and bring India into its orbit, may have underestimated India’s resolve. The Indian government has made it clear that its primary objective is to protect its national interests, including the livelihoods of millions of farmers and small businesses that would be devastated by an influx of cheap American goods. India’s commerce minister has repeatedly stated that a trade deal will only be signed if it is fair, balanced and mutually beneficial. This firm stance, coupled with a renewed focus on domestic manufacturing and export diversification, suggests that India will not be easily swayed by a pressure-driven approach. Moreover, the new tariffs put India at a significant competitive disadvantage compared to its regional rivals. While countries like Japan and South Korea have negotiated more favorable tariff rates with the US, India is facing a blanket 25% duty on virtually all its exports. This could have a devastating impact on labor-intensive sectors like textiles, gems and jewelry, and petrochemicals, which are key drivers of employment in India. The move also complicates the efforts of American companies, like Apple, that have been building a manufacturing base in India as an alternative to China. This inconsistency - pushing for a decoupling from China while simultaneously making Indian exports less competitive. It raises questions about the long-term coherence of the US’s trade strategy. The timing of the tariffs also adds to the complexity. They were announced just before a pre-set deadline for a trade deal, and a US delegation is scheduled to visit India for further talks. This timing suggests that the tariffs are indeed a negotiating tactic. This is a dramatic escalation designed to create a sense of urgency and force India’s hand. From this perspective, the tariffs are not the end of the story, but the beginning of a more intense phase of negotiations. The hope in Washington may be that the economic pain of the tariffs will push New Delhi to the negotiating table with a greater sense of compromise. However, this is a dangerous game. For India, a country with a proud history of strategic autonomy, giving in to such pressure could be seen as a sign of weakness. It could embolden other countries to try similar tactics, and it could damage the political standing of the government at home. The Indian market has not crashed, and while there is concern in export circles, there is also a sense of defiance and a belief that India can weather the storm. The long-term vision is to diversify away from a reliance on any single market, including the US, and to build a more resilient and self-sufficient economy. Whether Trump’s tariffs are a policy blunder or a power play will depend on the outcome. If they lead to a comprehensive trade deal that benefits both countries, they could be seen in retrospect as a necessary, if heavy-handed, negotiating tactic. But if they lead to a prolonged trade war, a deepening of distrust, and a further distancing of India from the US’s strategic goals, they will be remembered as a costly misstep. The path forward for both nations is narrow and fraught with risk. The true test will be whether they can navigate the geopolitical currents and find common ground, or whether the current tensions will prove to be a defining moment that drives them further apart ...

India, with its expanding global footprint and aspirations to become a manufacturing powerhouse, must now navigate the shifting sands of U.S. tariff policies with both caution and creativity ...

25 June 2025, NIICE Commentary 11350 Abhimanyu Bhardwaj For decades, it has been believed—or at least vigorously propagated—that the United States functions as a global force for good. The narrative of American exceptionalism has served as the ideological backbone of U.S. foreign policy since the Second World War. As Charles Krauthammer asserted in Things That Matter, “If someone invades your house, you call the cops. Who do you call if someone invades your country? You dial Washington... In the unipolar world, the closest thing to a centralized authority, is America—American power.” In this view, the U.S. was not just a superpower, but a custodian of the liberal international order, wielding both soft and hard power under the guise of benevolent leadership. In essence, U.S. hegemony was justified not as dominance, but as moral responsibility. However, the emergence of Trumpism has exposed the underlying hypocrisy of this mythos. Far from being a rupture, Trump’s foreign policy represents a discursive shift rather than a strategic one. Washington’s longstanding practices of coercion and regime destabilization were no longer disguised in multilateral language. Instead, threats became explicit. Recently on his Truth Social platform, he infamously wrote: “We know exactly where the so-called ‘Supreme Leader’ is hiding. We are not going to take him out (kill!)—at least not for now… Our patience is wearing thin.” Minutes later, he followed up with “UNCONDITIONAL SURRENDER!” Such rhetoric marks a shift from hegemonic subtlety to imperial bluntness. Yet, the global response to this shift has been largely mischaracterized. Analysts and commentators often interpret this phase as a deviation from the norm, when in fact it is a continuation of American hegemony, only without the pretense. The discomfort with Trump’s rhetoric stems not from a divergence in objectives but from the collapse of the moral framing that once legitimized those objectives. What is now perceived as American brazenness is not a new pathology but a long-concealed ethos now laid bare. The Myth of Benevolence: Origins and Persistence After the end of the Second World War, and more definitively following the collapse of the Soviet Union, the United States emerged as the uncontested hegemon in international politics—a position it sought not merely to occupy, but to justify through the moral language of benevolent hegemony. The transition from the Monroe Doctrine’s selective isolationism—which nonetheless included aggressive interventions in Latin America and the Caribbean—to the Truman Doctrine’s active internationalism marked a paradigmatic shift. No longer content with hemispheric dominance, the U.S. rebranded itself as the indispensable guarantor of a liberal world order. This was codified in its Cold War posture: to act as the global “policeman against communism”, shielding “free peoples” from the forces of totalitarianism. Whether it was military intervention in Korea (1950), the prolonged war in Vietnam (1955–1975), or the covert destabilisation of governments in Latin America, the United States consistently justified its actions as being in service of a greater global good. Later interventions followed the same template but adapted to new enemies: the Global War on Terror post-9/11, airstrikes in Pakistan and Afghanistan to the full-scale invasion and occupation of Iraq in 2003. Each of these operations was justified in the name of international security and democracy promotion. Yet, this belief system rests on a deeply selective historical memory and a well-calibrated machinery of soft power. American benevolence has been less a reality than a strategically cultivated myth, sustained through Hollywood narratives, public diplomacy, and an overwhelming dominance in global media discourse. As Edward S. Herman and Noam Chomsky famously argued, the U.S. has long relied on its ability to “manufacture consent”—not just domestically, but globally.  The Reality Behind the Rhetoric: A Legacy of Interference and Intervention U.S. foreign policy, far from being grounded in idealism or the spread of universal values, has consistently been guided by the imperatives of national self-interest and strategic dominance. While the rhetoric of democracy and freedom has remained central to its public diplomacy, American actions have often contradicted these lofty pronouncements. As political scientist Dov H. Levin meticulously documents, between 1946 and 2000, the U.S. engaged in at least 81 instances of electoral interference globally—ranging from covert funding of political parties to disinformation campaigns and more overt interventions. One of the most well-known examples of this interference was in Russia, where the U.S. played a decisive role in shaping the 1996 re-election of Boris Yeltsin. The manipulation was so overt that Time magazine ran a cover story hailing U.S. advisors who “saved” Russia’s democracy—oblivious to the irony of undermining democratic sovereignty in the name of democracy. At the same time, the United States has demonstrated an institutional inability to confront its own atrocities, both past and present. It remains the only country in history to have used nuclear weapons in war, targeting the civilian populations of Hiroshima and Nagasaki in 1945—an act that resulted in the deaths of over 200,000 people, mostly non-combatants. American alliances have not been contingent upon human rights or democratic values, but upon strategic utility. The apartheid regime in South Africa, military dictatorships in Pakistan, and the occupation policies of Israel have all enjoyed unwavering American support, despite widespread international condemnation.  Perhaps one of the most chilling articulations of American disregard for accountability came in 1988, when the U.S. Navy cruiser USS Vincennes shot down Iran Air Flight 655, a civilian passenger plane, killing all 290 people on board. In response, then-Vice President George H.W. Bush unapologetically stated, “I will never apologize for the United States. I don’t care what the facts are.” This chilling statement encapsulates the pathological confidence with which U.S. foreign policy often operates—prioritizing strategic impunity over moral responsibility. Enter Trump: The Naked Emperor Donald Trump’s “America First” doctrine did not signify a radical departure from the traditional goals of U.S. foreign policy—namely, the preservation of global primacy, and protection of strategic economic interests. Rather, it marked a rhetorical rupture, wherein long-standing imperial objectives were no longer obscured by the language of liberal internationalism. His infamous statement in October 2019, regarding U.S. troops guarding oil fields in Syria—“We're keeping the oil. I’ve always said that. We want to keep the oil.”—was not a strategic misstep but an unvarnished declaration of resource extraction as policy. While prior administrations had pursued similar objectives covertly, Trump simply made them explicit. Likewise, his staunch defense of arms deals with Saudi Arabia, even after the murder of journalist Jamal Khashoggi in the Saudi consulate in Istanbul, highlighted the transactional logic that undergirds U.S. alliances.  In the context of the Russia-Ukraine war, Trump once again broke with diplomatic precedent. During a televised event alongside Senator J.D. Vance, he openly chastised Ukrainian President Volodymyr Zelensky, insisting that Kyiv express more gratitude for U.S. assistance. Trump’s accusation that Zelensky was “gambling with World War Three” by rejecting ceasefire proposals brokered by Washington was not just a deviation from the established tone of alliance solidarity—it was an explicit indictment of U.S. aid as conditional patronage, not principled support. Yet the central point remains: Trump is not an anomaly. He is the logical extension of a system that has long prioritized power over principle, merely articulated with unprecedented bluntness. His administration made explicit what others had executed discreetly—supporting coups, arming despots, and enforcing sanctions that disproportionately harmed civilian populations. In that sense, Trump didn’t break the system—he simply broadcast it. Abhimanyu Bhardwaj is a Senior Research Scholar at Jawaharlal Nehru University, New Delhi ...

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