How a slighted Trump scuttled India-US deal

Since the beginning of Donald Trump's second term in January 2025, his administration’s approach to tariffs has evolved into a strategic tool, less about economic optimisation and more about leveraging the US economy as an instrument of political and geopolitical coercion. Tariffs, which under previous administrations were often viewed through the lens of trade imbalances or industry protection, have under Trump become a device for imposing US dominance, securing political concessions and advancing broader ideological and geopolitical objectives.

A telling example is how Trump scuttled the India-US trade deal when it was almost final. In pursuit of a Nobel Peace Prize, Trump has been in a hurry to style himself as a global peacemaker, ignoring complex and long-persisting contexts. He tried to force India into a peace deal with Pakistan but India refused to be coerced. That's when he decided to scuttle the trade deal which was nearly final. Chidanand Rajghatta of TOI has narrated this in a report today: "The final straw came when Modi declined Trump's invitation to stop by at the White House, on his way back from the G-7 in Canada, on the same day the US president had invited Pakistan's de facto military ruler Asim Munir. The Indian side feared a photo-op ambush. By this time, bilateral negotiations on trade were drawing to a conclusion with negotiating teams from both sides so close to a deal that top US officials said it was imminent. But peeved over what he possibly saw as multiple slights, Trump torpedoed it, using India's Russian oil purchase as a ruse."

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For Trump, tariff is not a narrow economic tool but a multipurpose geopolitical hammer. He has threatened tariffs over fentanyl on Canada, Mexico and China; on Brazil for prosecuting former president and Trump's friend Jair Bolsonaro; and on EU for digital taxes, even after a deal has been agreed to. He tried to use tariffs to corece India into a forced friendship with Pakistan, which remains a sponsor of anti-India terror, but failed. All these instances demonstrate that tariffs for Trump are a means to intimidate and not negotiate.

How Trump weaponised tariffs
Under the Trump administration in his second term, tariffs are no longer seen primarily as tools for economic correction or even competitive advantage. Rather, they are used as an extension of US power, a means to compel compliance and reshape the global balance of power according to Washington's interests. The methodology is starkly transactional: the US imposes punitive tariffs with the express aim of extracting specific policy outcomes from other nations, and in many cases, to undermine the influence of global competitors.

Why a slighted Trump would derail an almost final India-US deal is because tariffs are a tool for him to project personal power. If another country doesn't submit to his authority, Trump can jettison the whole economic and trade context and go after the country in personal rage. In Trump’s worldview, tariffs are also inextricable from his larger image as a strongman leader who restores America’s primacy on the world stage. His tariff policies cannot be disentangled from the political context in which they operate. Each tariff is presented as a declaration of strength and a testament to his willingness to challenge the established global order. This spectacle is part of a broader political strategy that is as much about branding as it is about governance. For Trump, these measures serve to reinforce his self-image as a fearless negotiator and protector of American sovereignty, reinforcing a narrative that appeals to both his domestic base and international critics.

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Trump’s tariffs, such as those aimed at European allies or key trading partners like India are often framed as moral imperatives, manifestations of his unyielding stand against perceived injustice or unfair trade practices. But beneath this lies a strategic objective: to isolate political adversaries, undermine international organisations that challenge US primacy (such as the World Trade Organisation), and create a framework for redefining global commerce based on American interests.

Using tariffs to force political concessions
A critical hallmark of Trump’s tariff policy is its transactional nature. Tariffs are deployed as instruments of coercion to extract specific political and economic concessions, often unrelated to trade itself. The US imposition of tariffs on India, for example, serves not to address traditional trade imbalances, but to punish New Delhi for its growing ties with Russia and for what Trump perceives as insufficient alignment with US geopolitical priorities as was evident in Trump's efforts to force on India a peace deal with Pakistan. The staggering 50% tariff on a broad swath of Indian exports, including textiles and gems, reflects a willingness to wield economic power for political leverage, with the aim of bending India to Washington’s will on issues ranging from defense alliances to energy policy.

The same logic applies to Trump’s approach toward the European Union. While negotiations surrounding tariffs on automobiles and industrial goods were framed as attempts to level the playing field, they were also part of a broader effort to force Europe into submission. Even after agreeing to a trade deal, Trump has threatened the EU with tariffs for its digital tax which impacts US tech giants like Google, Apple and Amazon. The US administration has made it clear: comply with US demands on tech policy, or face further tariffs. This is not about economic trade-offs; it is about asserting power.

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Similarly, Mexico has found itself in the crosshairs of Trump’s tariff policy, where economic pressure is applied not only in response to trade imbalances but also as a tool to extract commitments on issues like immigration control and border security. The use of tariffs to force Mexico into compliance with US domestic policy is a perfect illustration of the underlying dynamic of Trump's economic coercion -- using trade as a geopolitical tool to achieve political aims.

By alienating India, a key strategic partner, the US risks undermining its own regional influence and resilience. Critics argue Trump’s inconsistent targeting, penalising India while sparing China, the EU and Turkey, underscores a politically motivated double standard, affecting American interests as much as Indian ones.