Opinion Trump’s tariffs have hit South Korea and Japan. India has been wise in charting a cautious path
India’s approach has been less reactive and more deliberate so far. It seeks in proportionality a balanced trade deal, not one guided by coercively instated deadlines
New Delhi’s measured restraint has not amounted to inaction. In refusing to be drawn into a hurried round of concessions, India has preserved its negotiating space. 
Written by Deepanshu Mohan and Ankur Singh
What began as sweeping “Liberation Day” tariffs on April 2, encompassing a 10 per cent baseline duty and hikes up to 50 per cent, has mutated through deadline after deadline, first slated for July 9 and now postponed to August 1. Despite Trump’s insistence that these deadlines are “firm, but not 100 per cent firm,” the oscillation exposes the real motive by signalling resolve to voters at home while keeping global partners uncertain.
The “90 deals in 90 days” pledge is a centrepiece of Trump’s early April announcement, and has yielded only three preliminary renegotiated frameworks (UK, China, Vietnam), which is nowhere near the promised scale. With India, while the talks are still in progress, the US President signals its “close to signing on a trade deal with India”.
Wall Street has noticed how the Dow fell nearly 0.9 per cent (422 points) and Nasdaq by 0.9 per cent (188 points) following the announcement of fresh letters a day before. Yet investors remained oddly sanguine, treating the latest volatility as largely predictable.
In response to Trump, key markets in Asia have responded, contrasting India’s deliberate wait-and-watch approach with Japan and South Korea’s urgent firefighting to unpack who ultimately bears the cost in what may be a boomerang-heavy round of tariffs.
India’s path
Imports from Japan face a 25 per cent levy, while South Korea confronts the same rate. These measures threaten to ripple across global supply chains, raise production costs and disrupt trade balances. Meanwhile, India is charting a more cautious path. Having already submitted what officials describe as a “final and decent” offer, covering an estimated $150-200 billion in bilateral flows, it is now waiting for Trump’s verdict, with no further concessions on the table, as most reports suggest.
This stance is partly strategic. But it is also a gamble. India’s approach carries the risk of appearing inflexible precisely when other nations are bargaining hard. India’s bet assumes that the costs of tariffs will deter Washington from escalation. That assumption is not guaranteed. If the US chooses to target Indian exports, including pharmaceuticals, textiles and auto components, the impact on India’s current account and sectoral employment could be significant.
While Asian equities largely held their ground, the bigger question is what happens to the US itself. The Trump administration has targeted over $2.3 trillion in US imports with new tariffs. Japan and South Korea, which together account for around $135 billion in annual trade deficits, have become prime targets for pressure, leaving few sectors untouched. Furthermore textile and electronics hubs. Bangladesh, Cambodia, Thailand and Serbia now face duties up to 36 per cent almost guaranteeing that American consumers will see higher retail prices. US companies, importers and retailers will bear the initial costs which most economists expect to filter through the supply chain as a cost-push inflation.
The market’s reaction underscored this domestic vulnerability. On the day Trump’s letters appeared, the markets fell, bond yields dropped as investors fled risk, and the US dollar strengthened, further intensifying inflationary pressures. Asia’s markets for, at least, the moment have remained relatively steady.
The recent BRICS summit in Brazil underscores how this environment of contested trade is prompting emerging economies to re-examine established alignments.
While India joined the group’s broader critique of arbitrary tariffs and overreliance on the dollar, it has stopped short of endorsing more radical proposals, such as a common BRICS currency or aggressive de-dollarisation. This combination of solidarity and caution reflects a more calibrated approach, one that neither fully aligns with China’s agenda nor isolates India from broader coalitions seeking reform of the global trading system.
At home, New Delhi’s measured restraint has not amounted to inaction. In refusing to be drawn into a hurried round of concessions, India has preserved its negotiating space. Its approach has been less reactive and more deliberate so far. It seeks in proportionality a balanced trade deal, not one guided by coercively instated deadlines.
Mohan is Professor of Economics and Dean, IDEAS, Office of InterDisciplinary Studies, Director, Centre for New Economics Studies, Jindal School of Liberal Arts and Humanities. Singh works at CNES
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