The U.S. Homeland Security Agency announced that the United States began to impose tariffs of up to 50% on Indian products starting at 12:01 am on August 27. The tariff will apply to “all Indian goods imported for consumption or warehousing and withdrawal for consumption”.
Despite strong opposition from the Modi government, when the 50% tariff policy is implemented, it means that the trade between the United States and India is “actually dead.” Citigroup predicts that Trump’s tariff pressure will cause India’s GDP to fall by 0.6% to 0.8%.
On the other hand, with the extreme tension in the US-India relations, China-India relations have shown a recovery and a turning point.
On August 19, the China-India foreign ministers met and reached 10 important results, and the relationship between the two countries further recovered. Indian Prime Minister Modi said he would take caution to improve relations with China and planned to make his first visit to China in seven years on August 31.
Indian Prime Minister Modi meets with Wang Yi
British media believe that the rapid changing geopolitics forced India and China to engage and rebuild relations.
So, under Trump’s pressure, can the previous “dragon and elephant dispute” between China and India re-elephant and “dragon and elephant cooperation”?
Why does Trump impose tariffs of up to 50% on India? There are two main reasons.
First of all, of the US$129 billion bilateral trade volume of US$129 billion, the US trade deficit with India is as high as US$45.7 billion, which makes Trump bluntly say that India is a “vampire.”
Secondly, India’s continued purchase of Russian oil has provided Russia with a steady stream of financial support, which has annoyed Trump, who is trying to end the Russian-Ukrainian conflict as soon as possible, and even signed a presidential decree to impose sanctions on India.
However, in the face of US tariff pressure, Modi seems determined to “go against Trump.”
According to India Today, US President Trump has tried to speak with Indian Prime Minister Modi at least four times in recent weeks, but all of them have been rejected by Modi.
And the United States is not accustomed to Modi. Senior Indian officials have confirmed that the United States has canceled the sixth round of bilateral talks originally scheduled for August 25 to 30, and the signing of a trade agreement between the two countries is nowhere to be achieved.
Modi’s behavior of forcing Trump, although it seems very reckless. But Modi actually has his own logic in his heart.
