If there is one tool that Donald Trump wields with as much relish as tariffs, it is sanctions. These are the blunt instruments of choice for America’s chief peacemaker and dealmaker, used both to halt wars and to remake global trade in Washington’s image. Today, India finds itself at the receiving end of both these weapons: locked in a trade war with the United States and staring at the possibility of 50 percent tariffs by August 27th. Yet, in the ‘Art of the Deal’ playbook, tariffs are only theatre. Trump starts with maximalist demands, pushes hard and waits for the other side to blink. India has largely read this dynamic correctly.
Across the world, Trump’s tariff targets have chosen between three strategies: retaliate, ignore or negotiate. Among these strategies, patient negotiation has often yielded the best results. India, Infact saw the value of engagement with the Trump administration early in the game. In February, Modi and Trump agreed to scale up bilateral trade from US$200 billion to US$500 billion by 2030, with a trade deal to be set in place by 2025.
Five rounds of talks have already been completed. A near-final agreement sat ready for Trump’s signature until Trump pushed for last-minute concessions—greater market access in India for American soya, corn, wheat, milk, auto parts and more.
When geopolitics intervened
Two geopolitical developments complicated what was shaping up to be a largely economic negotiation: the flare-up in India-Pakistan tensions in May and Russia’s refusal to budge on Ukraine.
The unintended consequences of the India-Pakistan crisis showed the limits of diplomacy in the fog of war. India bristled at Trump claiming early credit for the Indo-Pak truce. But the US had not done anything dramatically different in the past. History offers examples of quiet American diplomacy in South Asia’s moments of peril—from Bill Clinton summoning Nawaz Sharif to Washington during the Kargil conflict to Musharraf’s 2002 pledge under US pressure to curb cross-border terrorism, US has a history of oscillating its strategic doctrines to and fro, based on its provisional geopolitical ambitions.
However, during Operation Sindoor, India’s military action rightly took centre stage and Washington’s behind-the-scenes role remained unmentioned in the Indian discourses. Trump, tone-deaf to Indian sensitivities, made matters worse by appearing to repeatedly hyphenate India and Pakistan and even hosting Pakistan’s Army Chief for lunch. For India, it was as it would have been for Israel if, in the aftermath of the October 7th attack, the White House had rolled out the red carpet for a Hamas leader.
Russia-Ukraine conflict and the collateral damage
The second irritant was the secondary sanctions on India tied to Russia. This was less about India and more about Trump’s frustration at Putin stringing him along on the Ukraine conflict. The fresh tariff announcement on August 6th was, in essence, a prod to Moscow to take peace talks on Ukraine seriously. India was just a collateral damage.
Ironically, India had already signalled willingness to import more US energy if prices were competitive, which they increasingly were. But sanctions, especially when trumpeted with bluster, served Trump’s narrative of pushing Putin towards a settlement.
A shifting global chessboard
Geopolitics in August looks starkly different from how it seemed in July. China has criticized the US “bullying” of India. BRICS members are privately comparing notes on Washington’s heavy-handedness. And Modi is expected to meet Xi and Putin at the SCO summit later this month.
The Alaska Summit between Trump and Putin, held on 15 August, was laden with heavy symbolism. For Putin, the swap deal includes eastern Ukrainian territory that Russia occupies and guarantees regarding a neutral Ukraine outside NATO. For Kyiv, the priority will be guarantees that Putin will not launch another invasion. Meanwhile, India has welcomed the Alaska initiative and whether the Russia-Ukraine peace deal in the foreseeable future can reduce additional tariffs on India, only time can reveal! Peace in Europe can be an opportunity to repair the collateral damage on the Indo-US ties and can help for lowering the tariff heat on India. But India must prepare for the alternative—a failure may deepen the divide and hardens Trump’s negotiating stance.
Play the long game
Trump’s tactics—provocative and theatrical—aim to extract the best deal for himself. His unflattering comments about India’s economy are best met with calm rebuttals, not wounded outrage. The strong ties between India and the US, painstakingly built since the formalization of the strategic partnership in 2000, run deeper than any one dispute.
Defence cooperation, technology partnerships, shared geopolitical goals and the energy of a five-million-strong Indian American diaspora provide structural ballast. Tactical compromises on trade must not breach red lines, but neither should they be deal-breakers. There is space for nuance, sequencing and phased convergence.
For New Delhi, the approach must remain strategic and long-term. When Trump crosses a line—and he will—India’s response should be firm but measured: a diplomatic rap on the knuckles rather than a public brawl. That preserves negotiating capital while signalling resolve.
This Trumpstorm, like other diplomatic tempests, will pass. India should keep calm and negotiate with both firmness and flexibility.
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