Squaring the Circle

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The US president's erratic tariff policy is disrupting global political relations. Long-standing alliances are being called into question, and new, unexpected alliances appear possible.

Today’s geopolitical environment is worse than during the past decades. The entanglement of economics calls into question established geopolitical logics. US president Donald Trump's fixation on tariffs has sparked a trade dispute that is calling into question old friendships and alliances and opening the door to new ones. A decision such as the imposition of tariffs at levels that are beyond rational comprehension, which has already affected many countries, has far-reaching consequences for global political and economic relations. Keeping these relations in balance or upholding the old rules-based world trade order is impossible. It's like squaring the circle.

The surprisingly harsh US tariff policy toward India illustrates the consequences for the complex relationship, the network of shifting alliances, the strategic rivalries, and the economic frictions. Because India continues to buy Russian oil in large quantities at favourable prices, thus filling Putin's war chest, Trump imposed punitive tariffs of 25 percent, in addition to the existing tariffs. The Indian government counters, calling Trump's policy "unfair, unjustified, and unreasonable."

Relations at a low point

Although Donald Trump and Indian prime minister Narendra Modi already got along well during Trump's first term and described each other as friends, India–US relations are now at a low point. The US had cultivated and nurtured its relationship with India since the mid-2000s because Washington viewed India as a counterweight to China. India, in turn, viewed the US as a strategically important partner in its conflicts with Pakistan and, above all, with China. Is all this now called into question simply because there were frictions in the tariff negotiations and India refuses to abandon its good relations with Russia?

Strong Indo-Russian relations have existed for decades, and although India is striving to diversify its arms supply, primarily through arms and technology deliveries from the United States, France, Germany, and Israel, the Indian armed forces are still dependent on cooperation with Russia. Around 60 percent of imported weapons systems originate from Russia or the Soviet Union. India justifies its purchase of inexpensive Russian oil with economic necessity, not with the alleged support of Russia in the Ukraine war. "We are a poor country" and therefore dependent on inexpensive imports, India's Foreign Minister Subrahmanyam Jaishankar has repeatedly emphasized.

Relations had already soured before Trump's tariff sanctions against India. When Donald Trump boasted in May that he had mediated in the conflict between India and Pakistan over Kashmir and patronizingly praised the Pakistani and Indian governments for their ‘common sense’, Modi reacted angrily and emphasized that there was no need for outside mediation. Trump then invited the Pakistani army chief, Field Marshal Asim Munir, to the White House. Trump's cozying up to the unelected de facto ruler helped Munir gain legitimacy and eased Pakistan's diplomatic isolation. The White House announcement that the army chief had been received by Trump came after Munir nominated Trump for the Nobel Prize, even though Munir had hinted at Pakistan’s nuclear weapons during the last Kashmir conflict. But US-Pakistani relations are not without friction. The not unfounded accusation of state-sanctioned terrorism in Pakistan still lingers.

Indo-Pakistani relations remain frozen. The recent conflict, with military clashes over Kashmir, resulting in losses and deaths on both sides, has thwarted all initiatives for a more relaxed relationship between the two hostile countries in South Asia. India tries to keep Pakistan politically isolated. But China continues to consistently support Pakistan diplomatically and militarily. Sino-Pakistani relations have long been described as an ‘all-weather friendship’. China is now Pakistan's largest arms supplier. Whether the US will regain more influence in Pakistan in the future because of Trump's charm offensive remains to be seen.

Trump is pushing Modi towards Xi Jinping

India–China relations are highly complex: limited cooperation in trade and within the BRICS group, competition and rivalry for influence in Asia, conflict over decades-disputed borders in the Himalayas, and occasional military clashes characterize the relationship between New Delhi and Beijing. Like many other countries, India has sought to reduce its import dependence on China in recent years by favouring other suppliers, primarily the US and the EU. This strategy, too, is now being called into question by Trump's tariff policy.

The failure of the tariff negotiations between the US and India has now brought the India-China relationship back onto the agenda. Modi and Xi Jinping appear to be cautiously reconciling after persistent tensions in the wake of the 2020 military clashes on the Himalayan border. After years of diplomatic distance, the Indian foreign minister travelled to Beijing in July to reduce trade barriers, initiate the resumption of direct flights, and agree on the exchange of hydrological data. This initiative is about diplomatic normalization. Modi plans to attend the next summit of the Shanghai Cooperation Organization (SCO) in China after six years of non-participation. The Indo-Chinese relationship has been characterized by ups and downs for decades. Even now, this cautious rapprochement by no means signifies mutual trust, but rather the search for alternatives in light of the strained relationship with the US.

At the end of September, Prime Minister Modi plans to travel to New York for the UN General Assembly. Will there be a detour to Washington and a visit to the White House? Perhaps Modi will also have to nominate Trump for the Nobel Prize to mend the rifts in US-India relations.

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Herbert Wulf is a Professor of International Relations and former Director of the Bonn International Center for Conflict Studies (BICC). He is presently a Senior Fellow at BICC, an Adjunct Senior Researcher at the Institute for Development and Peace, University of Duisburg/Essen, Germany, and a Research Affiliate at the National Centre for Peace and Conflict Studies, University of Otago, New Zealand. He serves on the Scientific Council of SIPRI.