KAUSHIK BASU
US President Donald Trump’s decision to hit nearly all Indian imports with a sweeping 50% tariff has upended one of India’s most important trade relationships. Instead of retaliating, India should draw on its non-aligned legacy and cultivate economic relationships with a wide range of like-minded countries. NEW YORK – Economic relations between India and the United States have been thrown into disarray after US President Donald Trump announced a sweeping 50% tariff on nearly all Indian imports, with the exception of iPhones and certain pharmaceutical products. The move places India among the five most heavily targeted countries under Trump’s tariff regime, alongside Brazil (50%), Syria (41%), Laos (40%), and Myanmar (40%).
DANI RODRIK thinks most countries have failed to capitalize on the crisis that Donald Trump has created. The announcement caught Indian policymakers off guard, particularly given Prime Minister Narendra Modi’s open support for Trump’s re-election campaign. The White House’s harsh statement, framing the move as punishment for India’s purchases of Russian oil, has only added to the confusion. As the Wall Street Journal recently noted, this reasoning does not hold up, since China – the largest buyer of Russian oil – has not been penalized for its purchases.
This dynamic is reminiscent of Anton Chekhov’s short story “The Ninny,” in which an employer withholds the equivalent of nearly a month’s salary from his children’s governess for arbitrary reasons. The governess accepts each cut without protest – a passivity that the employer chastises as spineless. The economist Ariel Rubinstein later drew on Chekhov’s story to develop a model illustrating how submission can invite exploitation.
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