The mystery shrouding the tariff controversy remains unresolved, rather deepening as the year ends that marks the tariff war President Donald Trump unleashed on the world in the very first quarter of 2025. Whether framed as a reassertion through recalibrating various tariffs as soon as he stepped into the White House and was inaugurated as the President of the United States of America for a second term this January, Trump’s introduction of newer economic norms, often referred to as “punishing” for certain countries, has generated widespread uncertainty.
Optics shake-up amid economic recession — Whether crushing or aimed at fine-tuning the world order through strategic economic measures, the process of projecting his ‘strongman’ persona and effectively implementing his “America First” policy saw President Trump taking extreme measures in many arenas, particularly foreign policy and the economy.
In an attempt to promote the American economy and check trade imbalances, he triggered a barrage of increased “Liberation Day” tariffs on more than sixty countries in his global tariff war. These included countries such as Canada (35 per cent tariff) and Mexico (whose tariff was increased to 35 per cent), as well as major trading partners like China (30 per cent), and the most affected—Brazil (50 per cent) and India (50 per cent). Meanwhile, the retaliatory trade and tariff seesaw peaked at 145 per cent (United States) and 125 per cent (China) in April.
Why India was marked once again — The Indian tariff has been a source of considerable controversy. For a long time, New Delhi has managed to avoid taking sides—first through the Non-Aligned Movement in Nehruvian times, and more recently through its attempt to balance strategic partnerships with rival global powers such as Russia, China, and the United States under the banner of multi-alignment.
During the Biden era, the United States and India managed to maintain balanced relations, as Indian Prime Minister Narendra Modi made state visits to the United States in 2023 and 2024. President Trump’s successor, Joe Biden, also had several interactions with Modi at various summits, including the Group of Seven in Germany and the Group of Twenty in Indonesia in 2022. At the same time, India maintained its relations with Russia largely untroubled.
It is worth remembering that President Trump, as a businessman, is likely deploying these measures for publicity and to discipline what he perceives as “independent-minded” countries
As the European Union stopped purchasing Russian oil, India began buying Russian oil at discounted rates. India had already refrained from taking a confrontational stance towards Russia at the United Nations Security Council after the Ukraine war and continued to purchase Russian oil, strengthening its ties with Moscow despite pressure from many Western nations to condemn the invasion and halt such trade. Even so, India’s relations with Western countries continued on a pragmatic basis.
In 2025, however, things took an ominous turn for India. Lately, President Trump has used every opportunity to assert influence, particularly in global conflicts, where he successfully pushed several warring parties—such as Thailand and Cambodia, Armenia and Azerbaijan, and Pakistan and India—towards ceasefire agreements. In the case of Pakistan and India, Trump appeared to favour Pakistan. From India’s perspective, matters deteriorated further when Trump imposed a 50 per cent tariff on India under the justification that New Delhi was indirectly fuelling the war in Ukraine by purchasing Russian oil.
However, there remains a silver lining for India. If we examine the current scenario, the country may not fulfil Trump’s expectation that it will abandon its policy of multi-alignment. India has managed to chart a positive trajectory in its relations with China, as trade between the two nations continues despite the fragile military situation along the McMahon Line. India’s previously strained relations with China have shown modest improvement, with both countries resuming direct passenger flights. India also continues to engage with other BRICS nations, particularly Brazil and Russia.
From the American perspective, Trump’s stance towards India is unlikely to benefit Washington in the long term. Tariffs will not only impact Indian industries but will also have adverse effects on the United States itself. Among the worst-affected sectors would be agriculture and pharmaceuticals.
About the latter, India supplies approximately 35 per cent of the generic drug requirements of the United States, and generic drugs account for nearly 90 per cent of all prescriptions dispensed in the country. As for agriculture, India has imposed a 39 per cent tariff on imported farm goods, which the Trump administration views as a major obstacle to bilateral trade ties.
Can Chanakya’s India play the ball? — Keeping everything in perspective, a crucial question arises: Is all of this sustainable? President Trump’s eagerness to assert dominance in international affairs appears to compromise the strategic interests of several nations, particularly India. Trump’s black-and-white approach seems to overlook the reality that many states, including India, operate within a far more nuanced strategic framework. India’s realist approach to multi-alignment is rooted in the alignment philosophy of the ancient strategist Chanakya, as articulated in the Arthashastra.
To secure economic, strategic, and political interests, Chanakya advocated a flexible and pragmatic approach to alliances. By contrast, Trump’s pursuit of his own policy objectives, often at the expense of the interests of others, including allies, appears highly unsustainable.
Some of the heavy tariffs imposed under an emergency-powers law were halted by an appeals court in the United States this summer, with the judiciary, including the Supreme Court, remaining sceptical in the final quarter of 2025 about the President’s authority in this regard.
Despite the whiplash felt both domestically and internationally, it is worth remembering that President Trump, as a businessman, is likely deploying these measures for publicity and to discipline what he perceives as “independent-minded” countries. There is therefore a strong possibility that, after achieving his intended “taming” objectives, he may ultimately compromise—especially if a country like India, seasoned in foreign policy and geo-economics, asserts itself more effectively at the negotiating table.