As the US-China trade war deepens, Washington has opened a volatile new front: slapping punitive tariffs on India for its continued imports of Russian oil. In August 2025, the Trump administration doubled tariffs on Indian goods to 50 percent, accusing New Delhi of indirectly bankrolling Moscow’s Ukraine war. The move has rattled Indian exporters, but its impact runs deeper: exposing cracks in America’s Indo-Pacific Strategy and risking a tilt of India toward Beijing and Moscow. Beyond spiking costs and fractured supply chains, the tariffs spotlight India’s resolve to guard strategic autonomy amid the waning shadow of U.S. dominance and a fast-unfolding multipolar order.

The U.S. tariffs on India arrive atop Washington’s intensifying economic war with China, turning trade into a global battlefield. America’s tariff war with China has hit a fever pitch recently. In a dramatic escalation, Donald Trump’s administration threatened duties as high as 145 percent on all Chinese goods, slapping a sweeping new tariff on Chinese imports, spiking as high as 245 percent on syringes, 173 percent on batteries, and 20 percent on laptops. The move, framed under “America First Trade Policy,” targets China’s export controls on critical minerals, state subsidies, tech coercion, and even its role in fentanyl trafficking. China swiftly retaliated, hiking tariffs on U.S. goods from 84 percent to 125 percent. With trade flows worth $582 billion at stake, the world’s two largest economies now stand on the brink of a tariff-fueled economic rupture.

Full Blown Trade War

What began with Donald Trump’s steel tariffs in 2018, has spiraled into a full blown trade war engulfing semiconductors, batteries, pharmaceuticals and electric vehicles (EV). However, far from protecting American industry, the policy has backfired. A 2023 National Bureau of Economic Research (NBER) study revealed tariffs slashed U.S exports, jobs, and productivity, while widening the trade deficit—evidence that protectionism often wounds the protector. WTO data echo the fallout: US-China trade flows have plummeted, yet China has deftly rerouted exports to ASEAN, the EU and Arica- swelling its surplus to nearly $1.2 trillion. Global supply chains, once seamless arteries of globalization, now resemble tangled knots. Multinational companies scramble for "China+1" strategies, shifting production to Vietnam, Mexico, and India. 

But diversification comes at a cost: pandemic-era shortages of medical supplies, ballooning logistics expenses, and raw material bottlenecks - a Journal of International Economics analysis links these disruptions to slower import growth in tariff-hit sectors. By 2025, hopes of de-escalation dimmed as rivalries hardened, turning what was meant as targeted pressure into a broader economic drag. The ripple effects are uneven: Mexico thrives on "nearshoring"; Vietnam and Taiwan capture electronics manufacturing; Africa deepens ties with China; while Russia and Brazil weather the storm with minimal exposure.

Diplomatic Stress Test

For India, Washington’s new tariffs are more than an economic blow - they are a diplomatic stress test. On August 27, 2025, the U.S. doubled duties on Indian goods at 50 percent,  squeezing exporters across engineering and manufacturing. “Gujarat-based solar module manufacturers had around ₹7,000 crore worth of U.S. orders. With tariffs at 50%, most will collapse,” warned Kunj Shah, Chairman of the Gujarat Chamber of Commerce and Industry (GCCI). A  Global Trade Research Initiative (GTRI) report estimates nearly $12.5 billion worth of Indian exports will be hit, especially outside the traditional steel, aluminum, and automobile sectors. 

The fallout is not just commercial. US-India relations have rattled New Delhi’s strategic elite as well as segments of Washington’s policy establishment. Two decades of carefully crafted U.S.-India rapprochement—spanning nuclear cooperation, defense exercises, and Indo-Pacific coordination—risk unravelling under what critics call Trump’s  “economic war” on India.  The damage has been amplified by rhetoric: Trump deriding India as a ““dead economy,” his trade adviser Peter Navarro accusing India of “playing a “double game” branding the Ukraine conflict “Modi’s war” and charging New Delhi of “cheating America on trade.”

Interestingly, India’s response has been firm yet calculated: India reaffirms its continuous commitment for a non-negotiable strategic autonomy  and further assured that its commitment to buy Russian oil is unavoidable. As a matter of fact, India’s import of Russian oil significantly increased after the Russia-Ukraine war, surging from a negligible level to 35-40 percent of India’s crude imports, saving billions but drawing U.S. ire. Washington’s penalties and tariffs only hardened New Delhi’s stance—energy security, it insists, cannot be compromised. Trump’s  "tariff king" taunts and threats to arms deals pushed India to freeze U.S. weapons buys and lean further on Moscow, while even testing a cautious reset with Beijing, thus reassuring its multilateral position by diversifying its trade and security with multiple actors. Yet India has kept the backchannel open. Even as the relationship shifts from leader-level “bromance” to brittle hostility, New Delhi signals willingness to negotiate, signaling it seeks relief, but on its own terms—not at the cost of autonomy.

Economics binding India, Russia

The U.S.-India bond is fraying, caught at the intersection of tariffs and energy politics, and the ripple effects are reshaping the global order. Nowhere was this clearer than at the recent Shanghai Cooperation Organization (SCO) Summit in Tianjin, where Chinese President Xi Jinping, Indian Prime Minister Narendra Modi, and Russian President Vladimir Putin shared the stage - an unmistakable signal of an Asia-centric power shift unfolding without the U.S. While Modi’s meeting with Putin indicates a deepening India-Russia partnership, fortified rather than weakened by the tariff-and-oil standoff with the U.S., on the other hand, the Xi-Modi bilateral meeting yielded a rare 10-point consensus on boundary issue, hinting at a cautious resetting Sino-Indian relations despite enduring mistrust and geopolitical worries. 

Beyond geopolitics, economics is binding New Delhi and Moscow closer. Russia’s consumer market is opening to Indian farm exports, while Russian labs tout breakthroughs like a personalized mRNA-based cancer vaccine, potentially significant for India, where nearly  2.5 million new cancer cases are expected  in 2025. Once a low-profile forum, the SCO is now a stage for global realignment, symbolizing the dawn of multipolarity: a world less about U.S. dominance, and more about shifting centers of gravity across Asia and beyond.

Washington's Eroding Grip

The shifting global order is unfolding against the backdrop of America’s waning unipolar dominance and the steady rise of multipolar worlds. For three decades after the Soviet Union’s disintegration 1991, the United States stood unrivaled - dictating terms of world politics, projecting its military might and leveraging economic tools from sanctions to structural adjustments programs enforced through IMF and world bank. It carried out 251 military interventions between 1991 and 2022, expanded NATO from 12 to 32 members, and pursued covert operations as far afield as Greenland, seeking control over mineral-rich Arctic gateways. But the edifice of American hegemony is cracking. Additionally, the global manufacturing lens shifting to China, with Southeast Asia and India rapidly climbing the value chain—triggering de-industrialization across the U.S. and Europe and further eroding Washington’s grip on the global order.

Beijing's Choreographed Message

Meanwhile, China’s transformation into the world’s industrial powerhouse, coupled with its sprawling Belt Road Initiative, and assertive “debt diplomacy”  has redrawn trade and strategic corridors. Its rapid military modernization—showcased in Beijing’s parades of new  intercontinental ballistic missiles —has forced Washington to acknowledge Beijing as its primary strategic competitor. Russia, meanwhile, has shored up its economy with oil and gas revenues and drawn hard red lines in Ukraine, signaling defiance against NATO’s eastward push. Together, Moscow and Beijing are preparing for what NATO leaders warn could be a “long-term confrontation”  with the West. Their solidarity was on full display when Xi Jinping walked through the crowds with Vladimir Putin, and North Korean leader Kim Jong Un flanking him in Tiananmen Square, sending a choreographed message of military and political alignment. The image of Xi, Putin, and Kim walking side by side ricocheted across global media, quickly dubbed a symbolic      “alliance of the elephant, the dragon and the bear.”

At the same time, the BRICS bloc —Brazil, Russia, India, China, and South Africa—has evolved from a loose economic grouping into a credible geopolitical challenger. Its push for trade in local currencies, sidestepping the U.S. dollar, has drawn enthusiastic support from much of the Global South and deep unease in Washington, which sees dollar supremacy as a pillar of its power. Against this backdrop, Donald Trump’s revived “Make America Great Again” mantra reads more as “nostalgia” than strategy.  His punitive tariffs,  anti-migrant move, and hollowing out of U.S. governance have failed to stem deindustrialization or slow the rise of Asian and Global South economies. Many economists now argue America’s comparative decline is irreversible. The unipolar moment has passed; the world is shifting toward a messy, contested multipolarity—with the elephant, the dragon, and the bear increasingly defining the balance of power.

India Hedging Its Bets

Trump’s tariff offensive may have backfired, giving India fresh room to maneuver. With U.S. trust eroding, New Delhi is hedging its bets—snapping up discounted Russian oil, deepening defense ties with France, opening new trade routes into Africa, and even probing a cautious reset with China. By all measures, the smart play for Donald Trump would have been to fortify the U.S.-India partnership—anchored in decades of strategic convergence and Indo-pacific alignment - rather than jeopardize it.” Ironically, Washington’s bid to tighten its Indo-Pacific grip risks pushing India toward the very powers it once sought to contain.

Yet India’s response is neither impulsive nor reactionary—it is rooted in a long tradition of strategic autonomy. From Nehru’s Cold War non-alignment to today’s “multi-alignment,” successive governments have insisted on freedom of action, refusing to let outside powers dictate India’s role in the world. This ethos, born of colonial subjugation, now guides New Delhi’s diversified diplomacy—anchored in democratic values, multi-vector partnerships, and a search for stability in a fractured global order.

Indo-U.S. ties may eventually recover, but the trust painstakingly built over two decades has frayed. As one analyst noted, “Empires decline not with a bang, but with fraying bonds. And the U.S.-India bond is fraying faster than Washington realizes.” For India, the moment underscores a hard truth: trade wars are no longer about tariffs but about power—and ‘autonomy’ is its sharpest shield.

(The author is a faculty in international politics at Easwari School of Liberal Arts and Chinmai Bai is a student in economics, Paari School of Business, SRM University AP, India. Views expressed are personal. She can be reached at manasi.s@srmap.edu.in )