Trade Wars: Trump Targets India

Aug 18, 2025

Sadanand Dhume is a resident fellow at the American Enterprise Institute and a columnist for the Wall Street Journal, while Tanvi Madan is a senior fellow at the Brookings Institution with expertise in Indian foreign policy. They dive into the recent 25% tariff imposed by Trump on India and the resulting diplomatic crisis. The duo explores India’s strategic response, the complexities of trade negotiations, and the implications for India’s foreign policy amid U.S.-Pakistan dynamics. They also discuss the potential for resolution in the U.S.-India trade spat.

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INSIGHT

Three Causes Behind The Tariff Decision

Sadanand Dhume identifies three strands: negotiation failures, Trump's preexisting view of India as a tariff problem, and fallout from the India-Pakistan episode.
These combined to produce the unexpected 50% tariff outcome against India.

INSIGHT

Personal Politics And Missing China Convergence

Tanvi Madan says the moment is trickier because Trump's actions feel personal and China convergence is unclear.
Without a shared China focus, incentives to smooth over differences have weakened.

ADVICE

Offer Tangible Political Wins To Trump

Dhume suggests India could have offered creative trade concessions or investment pledges to give Trump a political win.
Such tailored offers might have avoided the tariff escalation without major political cost to Modi.

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Last week, U.S. President Donald Trump issued an executive order slapping India with a 25 percent special tariff due to its purchases of Russian oil. This surprise measure raised the total tariff on Indian exports to the United States to 50 percent—among the highest rates imposed by the United States on any country in the world.But India is not just “any country.” Over the last quarter-century, it has emerged as one of America’s most valuable strategic partners. Trump’s tariff move has plunged the bilateral relationship into crisis, raising difficult questions about the future of both U.S. and Indian foreign policy.Grand Tamasha emerged from its summer hiatus for an emergency episode to make sense of these developments and their global ramifications. For this special episode, Milan is joined by Grand Tamasha regulars, Sadanand Dhume of the American Enterprise Institute and the Wall Street Journal and Tanvi Madan of the Brookings Institution.The trio discuss the drivers behind Trump’s decision, India’s response to the crisis, and the future of India’s policy of “multi-alignment.” Plus, the two discuss the U.S. government’s 180-degree turn on Pakistan and the prospects for an amicable resolution of the U.S.-India trade spat by summer’s end. Episode notes:

1. Praveen Swami, “Asim Munir’s India nuke threat from US ballroom—‘will take half the world down,’” ThePrint, August 10, 2025.

2. Sadanand Dhume, “India Is Losing Its Best and Brightest,” Wall Street Journal, July 30, 2025.

3. “Tanvi Madan on the geopolitical shifts revealed by the India-Pakistan crisis,” The Economist, May 12, 2025.

4. Ashley J. Tellis, “India’s Great-Power Delusions,” Foreign Affairs (July/August 2025).

5. Nirupama Rao, Dhruva Jaishankar, Lisa Curtis, and Ashley J. Tellis, “What Kind of Great Power Will India Be?” Foreign Affairs (September/October 2025).

6. Milan Vaishnav, “How India Can Placate America,” Foreign Affairs, July 16, 2025.

7. “What Kind of Great Power Will India Become? (with Ashley J. Tellis),” Grand Tamasha, July 2, 2025.