President Trump’s negotiation tactics are simple and brutal. He announces tariffs on this and that, puts a date on and then postpones them. The logic is, it seems, that to use threats of tariffs effectively to achieve political objectives, the tariffs will be announced first and then negotiations can be started on removing them, at least partially, depending on the outcome of the negotiations. This is an old and tried US strategy, used ad nauseam for sanctions against other countries: first the sanctions are introduced and then temporary waivers are announced, depending on the results of the negotiations, but they are not lifted. “The Sword of Damocles” is left hanging over the victims.
These tactics seem to be working to a certain degree. Some countries are surrendering and accepting not to retaliate against the US tariffs: the European Union, Indonesia, Japan, Pakistan, the Philippines, South Korea, the UK, and Vietnam. So it is working. But not with everybody.
Trump swept the floor with Ursula von der Leyen as EU surrendered and accepted US conditions for at trade deal: 15% tariff on European goods, and no retaliatory tariffs on US goods. Not all countries are so easily bullied. Photo from EU press release.
Trump has still not reached the most difficult deal: that with China. China is playing hardball and has introduced retaliatory tariffs and limited the US access to rare earth, much needed by the US high-tech companies. Trump has therefore had to back-track, and for the moment there is a temporary truce, while negotiations are ongoing. We don’t know how they will end. This should not come as a surprise. It wasn’t expected that the Chinese would let Trump sweep the floor with them as he did with EU’s Ursula von der Leyen.
However, it has surprised many that India decided to stand up to Trump in the trade dispute. India is a much weaker country, and the tariffs will have a serious impact on Indian exporters. At 50% it is practically a trade embargo. Indian Prime minister Narendri Modi seems decided to not let Trump steam-roll him, and this stance is popular with the Indian public. The opposition (the Congress Party) has taken a hard stance too, claiming that India should respond with a 50% retaliatory tariff on US goods. It will not be easy for Modi, if he makes a deal with the US, which is seen as giving in to Trump’s bullying.
Apparently taken aback, the US Embassy in India posted on September 1st a message by foreign secretary Marco Rubio stating: “The partnership between the United States and India continues to reach new heights — a defining relationship of the 21st century. This month, we’re spotlighting the people, progress, and possibilities driving us forward.” Bizarre statement as India (and Brazil) have been singled out with the highest tariff: 50%. Is that really how the Americans understand the concept “partnership” or have they become schizophrenic?
It seems US expected India to give in to the requirement to stop imports of oil from Russia, as that would reduce the tariff from 50% to 25% immediately. Why doesn’t it do that? It may, as part of a broader deal, or it may not. It will have a high cost for India. Firstly, India is heavily dependent on oil imports, and it gets a substantial rebate on the Russian oil. Secondly, if India starts buying up oil from the Middle East competing with other countries, the international oil price will likely jump. This will be expensive for India. So up to now it is a bargaining chip.
India has publicly stated that it will not stop importing oil from Russia, and to further angry Trump, the prime minister of India, Narendra Modi, made a show-off of his friendship with Russian President Vladimir Putin in Tianjin as he jumped into Putin’s (Russian made) Aurus Limousine instead of using his official car. There is no doubt that India wants a trade deal with the US and that this will imply easier access for US goods to the Indian market, but Modi has limited options as imports of for example US agricultural goods will be strongly resisted by Indian farmers. What Modi has been doing in Tianjin was sending a message to the US and Trump: “We have other friends, if you insist on being our enemy.” Trump is no doubt a tough negotiator, but so is Modi.
The prime minister of India, Narendra Modi, in Vladimir Putin’s Aurus Limousine in Tianjin September 1st 2025. Shared by Modi on social media.
The EU is deeply disappointed that Trump has not followed up on his threat to slap a 100% tariff on imports from countries buying Russian oil and gas. The main buyers are China, India and Turkey. I am not sure whether the EU politicians and bureaucrats have analysed thoroughly the consequences of what they are asking for. If part of the Russian oil and gas is taken off the international markets, prices will jump. Unless of course an agreement can be made with OPEC that they will increase production, which they supposedly can. However, I am not sure that OPEC will decide that it is in its interest to do that. It may in last instance lead to the break-up of the cartel. At least I haven’t seen any news indicating that they have accepted to do that.
The consequences of this could be more catastrophic for the EU than for Russia. As the US doesn’t import much oil any more, it will not affect it as a country, but it will imply a heavy financial redistribution from consumers to the oil companies. Not exactly what Trump promised his electorate.
To this comes that US has an interest in reaching a deal with both India and China. Threatening a 50 or 100% tariff because of Russian oil will undermine any deal, it can hope to reach. So I find the EU’s hope in this respect to be illusory.
The new pragmatic triangle in Tianjin: India, China and Russia? Photo from social media
In conclusion, to answer the question posed in the title: it is unlikely that India and China will form an alliance, but they have entered into a pragmatic rapprochement. President Xi stated it in Tianjin that the two countries should remain friends and foster good neighbourly ties, so that “the elephant and the dragon can dance together.” It is actually in both countries’ interest. So it is possible, it will happen.
