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الوسم: trade relations

  • India-U.S. Tension on Trade and Oil Sparks Broader Conflict

    India-U.S. Tension on Trade and Oil Sparks Broader Conflict

    US President Donald Trump listens while Indian Prime Minister Narendra Modi speaks at a joint press event at the White House in Washington, DC, on February 13, 2025. — Reuters

    President Donald Trump’s recent criticism of India over trade policies and purchases of Russian oil threatens to undo twenty years of diplomatic progress. Experts and officials warn that this tension could also disrupt other areas of bilateral cooperation, as domestic political pressures push both nations toward hardened positions.

    Indian opposition parties and the public have called on Prime Minister Narendra Modi to resist what they perceive as bullying by Trump. On Wednesday, Trump signed an executive order imposing an extra 25% duty on Indian imports, added to an existing 25% tariff, citing India’s significant Russian oil imports as the reason.

    Although India has become a strategic partner for Washington in its rivalry with China, its sizable US trade surplus and close ties with Russia—currently under pressure from Trump to negotiate peace with Ukraine—have made it a prime target in the Republican leader’s global tariff strategy.

    Trump’s suggestion that India could source oil from its rival Pakistan has also been poorly received in New Delhi, according to two Indian government sources. Additionally, India has rejected repeated claims by Trump that he used trade leverage to influence a recent conflict between Pakistan and India.

    This week, India issued a strong statement criticizing the US for applying two different standards—targeting Indian Russian oil imports while continuing to buy Russian uranium hexafluoride, palladium, and fertilizers. The government called the tariffs “unfair, unjustified, and unreasonable,” vowing to take all necessary measures to safeguard national interests.

    However, officials recognize that further escalation could harm India beyond economic matters. Unlike China, India lacks leverage—such as rare earth mineral supplies—to compel the US to improve trade terms. Over recent years, successive US administrations, including Trump’s, have actively cultivated a relationship with India, viewing it as a key partner to counter China’s growing influence.

    Nonetheless, analysts argue that Trump’s recent approaches have possibly brought the relationship to its lowest point since 1998, when the US imposed sanctions on India after nuclear tests.

    “India finds itself in a difficult spot: due to Trump’s pressure, Modi might reduce Russian oil purchases, but he can’t openly admit it for fear of unraveling diplomatic efforts or appearing to capitulate,” explains Ashley Tellis of the Carnegie Endowment for International Peace in Washington.

    “We risk a needless crisis that could undo a quarter-century of progress with India.”

    Recently, Indian state refiners have halted Russian oil imports as discounts diminish and pressure from Trump increases, according to Reuters.

    New Strains in the Relationship

    Another major challenge is the divergence in priorities, particularly on issues like work visas for tech workers and offshoring services, which are sensitive topics in US domestic politics. 

    A mobile crane carries a container at Deendayal Port in Kandla, Gujarat, India, April 5, 2025. — Reuters
    A crane moves containers at Deendayal Port in Kandla, Gujarat, India, on April 5, 2025. — Reuters

    India has historically benefited from US work visa programs and outsourcing of software and business services—areas that have caused friction, as Americans have lost jobs to cheaper Indian workers. Experts warn that relations could become a political battleground within the US, where issues like immigration, deportation, and international tech collaboration spark intense partisan debate.

    Since the 2008 nuclear technology cooperation agreement, the two countries have deepened intelligence sharing and defense collaborations, while also expanding engagement with Australia and Japan through the Quad to counter China’s influence in the Indo-Pacific region.

    Despite Modi’s good rapport with Trump and then-President Biden, cracks have appeared. For instance, images from February showing Indians deported on US military aircraft—shackled and distressed—stunned the nation just days before Modi’s visit to Trump to discuss tariff issues.

    The relationship was further strained in late 2023 when the US claimed to have thwarted a plot involving Indian links to an assassination attempt on a Sikh separatist leader in the US. India denied any official involvement.

    “The credibility of the Modi government in the US has declined,” said Sukh Deo Muni, a former diplomat and professor at Jawaharlal Nehru University in New Delhi. “There are those who believe India or Modi need to be ‘brought back on track,’ and if that trend continues, India faces significant challenges in navigation.”

    Strengthening Ties with US Rivals

    An Indian government source suggests that India is gradually repairing its relationship with the US while increasing engagement with other nations affected by Trump’s tariffs and aid reductions, including members of the BRICS bloc—Brazil, Russia, China, and South Africa—as well as the African Union.

    BRICS leaders at the 2023 summit in Johannesburg, including Brazil’s Lula, China’s Xi Jinping, South Africa’s Ramaphosa, India’s Modi, and Russia’s Lavrov.
    BRICS leaders, including President Luiz Inácio Lula da Silva of Brazil, President Xi Jinping of China, South African President Cyril Ramaphosa, Prime Minister Narendra Modi of India, and Russian Foreign Minister Sergei Lavrov, pose for a group photo during the 2023 summit at the Sandton Convention Centre in Johannesburg, South Africa. — Reuters

    India is taking steps to deepen relations with Russia and China. Russian President Vladimir Putin is expected to visit New Delhi this year, and Russia has stated discussions on enhancing strategic defense cooperation are underway.

    India has also increased engagement with China, following years of tension after a deadly border clash in 2020. Modi is scheduled to visit China soon for the first time since 2018.

    “Russia will likely try to use the US-India rift by proposing the revival of the Russia-India-China trilateral and new defense projects,” commented Aleksei Zakharov of the Observer Research Foundation in New Delhi. “India will be cautious of sanctions and seek a balanced approach in dealing with the US.”

  • Trump announces 25% US tariff on India starting August 1

    Trump announces 25% US tariff on India starting August 1

    During the G20 summit in Buenos Aires on November 30, 2018, U.S. President Donald Trump and Indian Prime Minister Narendra Modi met. Trump criticized India for its “obnoxious” trade barriers that aren’t measured in monetary terms. He also pointed out the close military and energy ties India has with Russia, noting that India buys the majority of its military equipment from Russia and is Russia’s largest energy customer alongside China—all during a time when international pressure is mounting for Russia to cease hostilities in Ukraine. Trump asserted that India’s high tariffs have negatively impacted U.S. businesses for years.

    On Wednesday, Trump announced that starting August 1, the U.S. will impose a 25% tariff on goods imported from India. He also mentioned that India would face an additional, unspecified penalty on the same date, though details about the penalty’s amount or purpose were not provided. In a post on Truth Social, Trump explained that, despite being friends, the U.S. has conducted relatively little trade with India due to its high tariffs—among the highest worldwide—and difficult non-monetary trade restrictions.

    He emphasized concerns about India’s ongoing procurement of military hardware from Russia and its status as a leading Russian energy buyer, which he described as problematic, especially amid global calls to put an end to Russia’s actions in Ukraine. India’s commerce ministry, responsible for trade negotiations with the U.S., had not responded immediately to requests for comments at the time.

    This move by Trump effectively ends hopes for a limited trade agreement, which had been under discussion for months. Negotiators had worked through multiple rounds on issues like market access for American agricultural and dairy exports. Although there was some progress, India resisted opening its market to imports of wheat, corn, rice, and genetically modified soybeans, citing the potential threat to the livelihoods of millions of Indian farmers.

    The new tariffs are forecasted to impact India’s exports worth around $87 billion to the U.S. in 2024, including labor-intensive products such as clothing, pharmaceuticals, jewelry, and petrochemicals. The U.S. and India currently have a trade deficit of approximately $45.7 billion. India becomes part of a growing list of countries facing higher tariffs under Trump’s “Liberation Day” trade policy, which aims to renegotiate trade terms to secure more reciprocity.

    Previously, the White House had raised concerns about India’s high average tariffs—nearly 39% on agricultural products, climbing to 45% on vegetable oils, and around 50% on apples and corn. Despite these tensions, both Modi and Trump had committed to completing the first phase of a trade deal by fall 2025 and boosting bilateral trade to $500 billion by 2030, up from $191 billion in 2024. Exported U.S. manufacturing goods to India, valued at roughly $42 billion in 2024, along with energy exports such as liquefied natural gas, crude oil, and coal, might also face retaliatory measures if India chooses to respond in kind.

    Indian officials have historically viewed the U.S. as a strategic partner, especially to counterbalance China, but they insist on maintaining policy flexibility on matters related to agriculture, data governance, and subsidies.

  • Trump and Xi Speak Amid Tense Trade Relations

    An undated photo of US President Donald Trump waving while walking with Chinese President Xi Jinping.
    An undated photo of US President Donald Trump waving while walking with Chinese President Xi Jinping. — Reuters/File

    • Trump initiated a phone call amid tense trade relations.
    • The conversation takes place as accusations arise over essential minerals.
    • The fragile 90-day tariff rollback agreement faces challenges with ongoing accusations.

    On Thursday, Chinese President Xi Jinping engaged in a phone conversation with US President Donald Trump, according to China’s state news agency, Xinhua. This discussion comes as trade tensions between the two nations continue to mount.

    The call was made at Trump’s request, but Xinhua did not disclose any specifics about their discussion.

    The White House has yet to provide a comment on the matter.

    This highly awaited conversation occurs against a backdrop of blame traded between Washington and Beijing regarding essential minerals in a conflict that threatens to unravel a delicate ceasefire in their ongoing trade war.

    On May 12, the two nations agreed to a 90-day deal that would reduce some of the retaliatory tariffs imposed against one another since Trump took office in January.

    While the stock market reacted positively, the provisional agreement failed to address broader issues that have strained their relationship, including the illegal fentanyl trade, the status of Taiwan, and US grievances about China’s state-controlled, export-oriented economic model.

    Since his return to the White House in January, Trump has consistently threatened various punitive measures against trading partners but has often walked back those threats at the last moment. This erratic behavior has left global leaders and business executives bewildered, with many stating that the unpredictability complicates market forecasting.

    In April, China halted exports of several critical minerals and magnets, causing disruptions for automakers, chip manufacturers, and military contractors across the globe.

    Beijing views mineral exports as leverage; curtailing them could generate domestic political pressure on the Republican president if economic growth slows due to production delays for mineral-dependent products.

    The 90-day tariff rollback agreement remains precarious. Trump has accused China of violating the terms and has imposed restrictions on chip design software and other shipments destined for China, while Beijing has refuted these claims and threatened to retaliate.

    Trump has long sought a call or a meeting with Xi, but China has resisted, adhering to its traditional practice of resolving details before involving the leaders.

    The US president and his advisors believe that direct conversations between leaders are essential to overcoming the deadlock that has hindered lower-level negotiators.

    The last known contact between the two leaders remains unclear.

    Investors are closely monitoring the situation, concerned that a chaotic trade war could impact corporate profits and disturb supply chains in the crucial months leading up to the holiday shopping season. Trump’s tariffs are also currently under dispute in US courts.

  • 2025 U.S.-China Tariffs: 30% on China, 10% on U.S. Imports

    2025 U.S.-China Tariffs: 30% on China, 10% on U.S. Imports

    Overview of Recent U.S.-China Trade Developments

    In a notable change in the ongoing trade tensions between the United States and China, both countries have announced significant tariff reductions. These changes come on the heels of negotiations held in Geneva and aim to ease the economic strain characterized by previous high tariffs. This blog delves into the details of the tariffs, their background, and the implications of this trade adjustment.

    Background of the Trade War

    The trade war between the U.S. and China escalated sharply over the previous years, leading to tariffs on billions of dollars’ worth of goods. Initially, U.S. tariffs on Chinese imports reached an astonishing 145%. In retaliation, China imposed tariffs that were as high as 125% on American products. These tariffs, once implemented, had significant ripple effects across global supply chains, affecting businesses and consumers alike.

    Recent Tariff Changes

    Following the 2025 negotiations in Geneva, both nations are set to lower tariffs significantly. Starting Wednesday, tariffs on Chinese goods imported into the U.S., which were as high as 145%, will be reduced to a more manageable 30%. Concurrently, Chinese tariffs on U.S. imports will decrease from 125% to merely 10%. This reduction marks a crucial shift in the trade dynamics between these two economic giants.

    Current Tariff Landscape

    While these adjustments are a relief for many stakeholders, it’s important to understand the current status of tariffs:

    • U.S. Tariffs on Chinese Imports: Now sitting at 30%, these tariffs remain elevated compared to historical levels but represent a sharp contrast to the previous figure of 145%.

    • Chinese Tariffs on U.S. Imports: The new 10% duty reflects a significant reduction from the previous 125%, yet still poses a burden on American export markets.

    These figures signify a marked transformation in trade relations, albeit one that continues to impose challenges.

    Economic Implications and Future Outlook

    With the pause of heightened tariffs, the short-term economic outlook appears to stabilize following a volatile few months in global markets. Still, the new baseline tariffs are considerably high compared to pre-trade war levels. The reality is that even at 30% and 10%, the tariffs are an obstacle that can lead to increased prices for consumers and reduced exports.

    The negotiating teams from both nations have announced intentions to continue discussions. Future meetings between President Biden and Chinese President Xi Jinping are anticipated, which could lead to further changes in trade policies.

    Monitoring Trade Dynamics

    It is crucial for both businesses and policymakers to monitor the evolving trade dynamics closely. The establishment of a mechanism for ongoing discussions indicates a willingness from both parties to address trade disputes constructively. However, the elevated tariff environment suggests that significant hurdles remain before a normalized trade relationship can be established.

    Understanding these nuances is vital for all stakeholders engaged in international trade, as the ramifications of these tariffs will affect pricing strategies, production costs, and ultimately, consumer behavior on both sides of the Pacific.

  • US Executives Voice Concerns Over Trump’s Tariff Plans

    US Executives Voice Concerns Over Trump’s Tariff Plans

    Title: US Business Leaders Raise Alarm Over President Trump’s Tariff Plan

    WASHINGTON: Business leaders across the United States have voiced their concerns regarding President Donald Trump’s recent tariff plan. They warn that the extensive new tariffs on imports could lead to increased costs, supply chain disruptions, and detrimental effects on both American companies and consumers.

    During a press conference held on the White House lawn, Trump announced a baseline tariff of 10 percent on nearly all countries that trade with the US, set to take effect on April 5. Additionally, from April 9, an extra surcharge will be applied to nations that impose tariffs and other barriers against US companies.

    Trade organizations expressed alarm over these tariffs, especially the new duty that would raise tariffs on many goods imported from China to a staggering 34 percent when combined with existing fees.

    "The implementation of such significant tariffs will create challenges and disruptions that restaurant owners will have to manage to ensure their businesses remain operational," stated the National Restaurant Association in their press release.

    Jay Timmons, president of the National Association of Manufacturers, echoed this sentiment, emphasizing the severe risks manufacturers face. "Many US manufacturers already operate on narrow profit margins," he explained. "The escalating costs tied to these new tariffs pose a threat to investments, jobs, and supply chains, ultimately undermining America’s position as a leading manufacturing power."

    In addition to China, other major US trading partners, including the European Union and India, will encounter new tariffs of at least 20 percent starting April 9.

    Neil Bradley, chief policy officer of the US Chamber of Commerce, criticized the broad tariffs before they were officially announced, asserting, "These tariffs constitute a tax hike that will inflate prices for American consumers and negatively impact the economy." He urged policymakers to pivot their focus toward programs that promote economic growth, like extending current tax policies and rebalancing regulations.

    A recent analysis from Yale University’s Budget Lab revealed that a blanket 20 percent tariff could cost the average American household over $3,400—an alarming adjustment for many.

    Gary Shapiro, CEO of the Consumer Technology Association, commented, "President Trump’s extensive tariffs are essentially massive tax increases on everyday Americans that will spur inflation, endanger jobs, and potentially lead to a recession."

    While many expressed concern, some advocacy groups welcomed the tariff announcement. "Today’s trade action prioritizes domestic manufacturers and American workers," said Scott Paul, president of the Alliance for American Manufacturing. "These dedicated individuals have endured the consequences of unfair trade practices for far too long. They deserve a fair opportunity," he affirmed, calling the announcement "a crucial step toward reform."