U.S. President Donald Trump’s bid to squeeze New Delhi with steep, shifting tariffs — and to use that pressure as leverage around the Ukraine war — is colliding with reality. His Alaska summit with Vladimir Putin ended without a ceasefire, undercutting the implicit bargain that tougher duties on Indian exports could translate into diplomatic breakthroughs.
The outcome has sharpened scrutiny of both the tariffs’ economic logic and their political costs for a U.S.–India relationship built painstakingly over decades.
How the tariff squeeze escalated
Trump first slapped a 25% “reciprocal” tariff on Indian goods, then added another 25% tied to India’s continued purchases of discounted Russian crude — lifting total duties to 50% in a matter of days. New Delhi condemned the measures as “unfair, unjustified and unreasonable,” while opposition leaders assailed them as “economic blackmail” that would hit key export sectors and jobs.
Trump framed his broader tariff regime as “a little tough love,” a declaration of “economic independence” intended to “pry open foreign markets” and revive U.S. manufacturing — rhetoric he has repeated since launching his “Liberation Day” tariffs in April.
The Alaska meeting and a credibility problem
The high-stakes Anchorage encounter produced no deal on Ukraine; Trump said plainly, “There’s no deal until there’s a deal.” He then pivoted to arguing for a direct “peace agreement” over a ceasefire — a position closer to Moscow’s than to Kyiv’s or European partners’ — further muddling expectations he had set before the talks. For many in India and beyond, the failure to deliver in Alaska while escalating tariff threats eroded confidence in the strategy’s credibility.
Analysts note the second 25% tariff on India was explicitly cast as secondary pressure linked to Ukraine and Russian oil — a linkage that made the Alaska outcome a practical test of Trump’s approach. With no ceasefire secured, the linkage now looks like coercion without results.
Strain on U.S.–India ties — and the surge of public criticism
Beyond economics, the tariff shock has politicized the U.S.–India relationship inside India and rattled trust in Washington’s consistency. Veteran observers warn the moves risk unraveling two decades of hard-won convergence on trade, tech, and security, recasting the partnership as a domestic political flashpoint in both countries.
“America’s most important relationship in the 21st century is with India. Much of that is now at risk.” — Kurt Campbell
- India’s official stance: The Ministry of External Affairs called the additional duties “unfortunate” and “unfair,” emphasizing that several countries also buy Russian energy based on national interest.
- Indian opposition leaders: Rahul Gandhi labeled the 50% rate “economic blackmail,” while Shashi Tharoor urged reciprocal tariffs, reflecting an unusually unified chorus against Washington’s coercive tone.
- U.S. voices of caution: Former Deputy Secretary of State Kurt Campbell called the 50% tariff “detrimental” to “America’s most important relationship in the 21st century,” urging India not to “bend the knee.” Former NSA John Bolton blasted the inconsistency, arguing the moves jeopardize decades of U.S. efforts to bind New Delhi closer. Ex-ambassador Michael McFaul questioned why India was singled out despite China’s larger Russian oil intake.
“Why is India being targeted when China buys more Russian oil?” — Michael McFaul
Together, these reactions underscore a widening perception that the tariff gambit is coercive, selective, and strategically self-defeating.
Economic and diplomatic fallout far beyond India
- Domestic costs in the U.S.: Tariffs act as a consumption tax, raising input costs and prices, fueling uncertainty, and pressuring the Fed to keep rates higher for longer. Small businesses report squeezed margins, volatile quoting, and delayed projects as supply chains absorb higher duties and longer lead times.
- Global knock-on effects: Southeast Asian economies scrambled to cut deals amid shifting tariff lines and exemptions, highlighting how ad hoc carveouts can distort competition and confidence. The pattern has jarred markets and encouraged re-routing rather than reshoring, while leaving allies wary of Washington’s unpredictability.
- Strategic blowback: From threatening secondary penalties over Russian oil to courting Pakistan’s military leadership, Washington’s mixed signals have revived old suspicions in New Delhi and complicated coalition-building in the Indo-Pacific — precisely the arenas where U.S.–India coordination had deepened. Experts warn this repoliticization risks turning a strategic partnership into a transactional tug-of-war.
Even Trump’s own pitch — that tariffs are painless and profitable — is belied by evidence that U.S. firms and consumers shoulder most costs, while policy whiplash chills investment and trade planning.
India’s next moves — resilience and recalibration
New Delhi is signaling both resolve and pragmatism. The Prime Minister’s Office has convened an inter-departmental panel to streamline export taxes and clearances, aiming to bolster competitiveness in sectors most exposed to U.S. demand. Industry bodies are pushing for immediate relief while the government explores structural fixes across pharmaceuticals, electronics, textiles, gems and jewelry, agri-processed goods, and more.
At the same time, markets have digested that the macro hit may be contained. Standard & Poor’s upgraded India’s sovereign rating, noting that even a 50% U.S. tariff would likely have a “manageable” growth impact given India’s domestic-demand engine and probable sectoral exemptions — though labor-intensive exporters could face sharper pain. That nuance captures India’s dual track: cushion near-term shocks, and accelerate long-planned diversification and value-chain moves.
Direct answers
- Did Trump’s tariff pressure on India work? It has not delivered its stated diplomatic aim. The Alaska summit produced no Ukraine ceasefire, and the tariff linkage has amplified friction without securing concessions.
- What are the broader implications? Rising economic costs at home, shaken confidence abroad, and a real risk of unraveling U.S.–India gains built over decades — with prominent leaders on both sides warning against coercion and inconsistency.