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In the past fortnight, the Asia Media Centre examined the widening US tariff war with countries in Southeast and Northeast Asia. In the latest edition of the On the Radar, the focus shifts to South Asia, where recent developments have seen a turbulent few months and unexpected geopolitical shifts.
The US has activated tariffs on more than 90 countries, ranging from 10 to 50 percent — the highest average US tariff rate since 1933, according to analysis by the Yale Budget Lab. The lab projects these tariffs will cost the average US household the equivalent of US$2,400 (NZ$4,100) annually.
Here, we unpack how these new tariffs are affecting South Asian nations, their industries, and the wider geopolitical landscape.
India: From ‘Great Friend’ to Strategic Friction
Indian Prime Minister Narendra Modi was among the first world leaders to visit Washington after US President Donald Trump began his second term. Trump hailed Modi as his “great friend,” with the two leaders setting an ambitious target of doubling trade to US$500 billion by 2030.
Less than six months later, relations appear to have soured.
Trump has imposed 50 percent tariffs on Indian imports, with the threat of an additional 10 percent still looming due to India’s membership in the BRICS grouping — which includes China, Russia and South Africa.
On July 31, Trump announced a 25 percent tariff, which came into force on August 7. He then added another 25 percent on August 6 as a penalty for India’s purchase of Russian oil. The doubled tariff rate takes effect from August 27.
“Well, we are negotiating right now and it's also BRICS. BRICS, which is basically a group of countries that are anti the United States and India is a member of that if you can believe it...It is an attack on the dollar and we are not going to let anybody attack the dollar. So it's partially BRICS and it's partially trade,” Trump said last month.
India exported nearly US$87 billion worth of goods to the US in 2024, making America its largest export market. Sectors such as textiles, footwear, shrimp, gems and jewellery are now under threat.
Reports of Trump calling India’s economy “dead” two weeks ago also shocked observers, signalling a sharp reversal in bilateral ties.
An Al Jazeera report noted that Washington’s earlier warmth towards India stemmed from its role as a balancing force against Beijing’s growing influence in the Asia-Pacific. Under Obama, the US famously described India as its “best partner.” Today, relations look anything but.
Read the full report on the Asia Media Centre website
-Asia Media Centre
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