When US officials weigh the fallout of President Donald Trump’s stunning move to slap a 50% tariff on Indian exports, they may not need to pore over spreadsheets or trade projections. Instead, they can look halfway across the globe to Beijing, where this week India’s Prime Minister Narendra Modi stood shoulder to shoulder with China’s Xi Jinping and Russia’s Vladimir Putin.
The symbolism was unmistakable. Modi’s first trip to the Chinese capital in seven years — one timed with almost theatrical precision — came as Trump doubled down on his protectionist agenda, tightening the screws on not just China but also India, Brazil, and South Africa. If the White House intended to cow these countries into submission, the result appears to be the opposite: the optics from Beijing have given new momentum to calls for a less US-centric, multipolar world order.
The image of Modi smiling beside Xi and Putin may prove one of the enduring snapshots of this turbulent year. To observers in Washington, the gathering suggested not a chastened India, but a reinvigorated BRICS bloc — a grouping of Brazil, Russia, India, China, and South Africa that, until recently, seemed to be running out of steam.
Just months ago, BRICS appeared to be faltering. Its members squabbled over economic priorities, border tensions, and leadership visibility. In fact, Xi skipped the July BRICS summit in Rio de Janeiro, a move that led many to declare the bloc’s relevance all but over.
But that was before Trump’s August tariff blitz. By slapping a 50% tariff on India and Brazil, and ratcheting up duties on China and South Africa to 30%, Trump not only signaled his disdain for the world’s biggest emerging economies but also inadvertently gave them a common cause.
“The classic maxim of foreign policy is unite your friends and divide your adversaries,” former US Treasury Secretary Larry Summers told Bloomberg. “What Trump has done is precisely the opposite. He is uniting America’s competitors.”
To US allies who have long sought to counter China’s growing clout, the timing could not be worse. The tariffs have left Modi with fewer incentives to stick to Washington’s orbit and every reason to strengthen ties elsewhere — even with historic rivals like Beijing.
On the surface, Modi’s Beijing stopover might seem like a full embrace of China’s orbit. But analysts warn against oversimplification.
“India isn’t about to abandon its balancing act,” said Jeremy Chan, an analyst at Eurasia Group. “Modi flew in from Tokyo and left before China’s Victory Day parade. That’s not accidental. He’s signaling to Beijing that India values engagement — but not at the cost of its partnerships with Japan or the US.”
Indeed, as Christopher Clary of the University at Albany explained to The Guardian, India’s great-power strategy thrives on options. “One advantage of being in lots of clubs,” Clary said, “is you can make high-profile entrances to those clubs if you’re upset with how things are going in other relationships.”
Still, Modi’s appearance with Xi and Putin was a partial response to Trump’s tariff tantrum, Clary argued. “The reality for India is that it doesn’t have enough military capability to be confident about a fight with China. And in this Trumpian world, India may not find an outside ally it can rely on. So, keeping relations with China calm is the rational choice.”
For Xi Jinping, the timing could not be better. China has been working overtime to frame itself as the defender of the Global South against what it calls US “hegemonism.” At the Shanghai Cooperation Organization summit, Beijing cast its model of non-interference, multilateralism, and dialogue as the antidote to US-led pressure campaigns.
“Unilateral bullying has been a consistent theme in China’s foreign policy rhetoric,” Chan said. “Trump’s tariffs just reinforce Beijing’s narrative that the US is trying to hold down emerging economies. It gives China an opening to deepen ties with developing countries.”
With India now bruised by US trade measures, Xi’s messaging lands with more resonance.
For New Delhi, the numbers are stark. The US is India’s single largest export market, and Trump’s tariff hike could seriously dent industries ranging from textiles to pharmaceuticals.
“India has received a raw deal that could significantly hit its exports,” noted Priyanka Kishore, economist at Asia Decoded. She added that while further negotiations might bring the rate down to 25%, “it appears unlikely India will secure a significantly better outcome than its eastern neighbors.”
Shilan Shah of Capital Economics warned that India’s aspirations as an emerging manufacturing hub are “hugely undermined” by Trump’s policies. “US spending accounts for about 2% of India’s GDP,” he said. “A 25% tariff shock is large enough to have a material impact.”
Economist Ajay Srivastava of the Global Trade Research Initiative went further: “The US actions could push India to reconsider its strategic alignment, deepening ties with Russia, China, and many other countries. This is precisely what Washington has long feared.”
Ironically, India’s economy is showing resilience — at least in the short term. Data released this month showed growth accelerating to 7.8% in the April-June quarter, the fastest pace in five quarters. Private consumption and government spending both rebounded, suggesting domestic demand is cushioning external shocks.
“We are maintaining our growth range of 6.3%-6.8% for the full year,” India’s Chief Economic Adviser Anantha Nageswaran said.
To offset tariff pressures, the government has moved aggressively on reforms. Finance Minister Nirmala Sitharaman announced a simplification of India’s notoriously complex goods and services tax (GST) regime, cutting it to two rates. Economists hailed the move as a timely boost to domestic demand.
“Lower GST rates will be positive for growth in the second half of the year,” said Radhika Rao of DBS Group. “It expands the size of India’s formal economy and offsets tariff shocks.”
Meanwhile, UBS economist Tanvee Gupta Jain described the reforms as “apt counter-cyclical policy” that will support household spending.
But economists also warn of headwinds. Carlos Casanova of Union Bancaire Privée noted that heightened uncertainty is weighing on investor sentiment. “While exports to the US are only 2% of GDP, the indirect effects could be larger — dampening foreign direct investment and fixed capital formation.”
In geopolitical terms, Trump’s tariff gambit has achieved the opposite of what Washington intended. Rather than isolating China or dividing BRICS, it has pushed India closer to Beijing.
The BRICS bloc, once seen as a loose economic talking shop, suddenly has renewed urgency. Leaders are once again discussing alternatives to the US dollar as the global reserve currency — a red line for Washington.
“Trump’s actions are forcing countries to look for workarounds,” said a senior Indian diplomat, speaking anonymously. “It’s not that we want to undermine the dollar system. But if the US uses its dominance to punish us, we need alternatives.”
That sentiment echoes in Moscow, where Russia has been promoting de-dollarization ever since Western sanctions over Ukraine. China, too, has been pushing the yuan as a settlement currency in Asia and Africa. Now, with India under pressure, the concept no longer looks purely theoretical.
That said, BRICS unity has limits. India and China remain fierce rivals, with a bloody border clash just three years ago. Both compete for influence among Global South nations, while Brazil and South Africa fear that expanding the bloc could dilute their voices. Russia’s war in Ukraine adds yet another complication.
Still, Trump’s trade salvos have altered the calculus. Shared grievances can paper over long-standing divisions, at least temporarily.
“Trump may be the unexpected glue holding BRICS together,” quipped one Asian diplomat.
For Washington, the dilemma is sharp. Tariffs are a blunt tool, popular with Trump’s political base but fraught with geopolitical risks. By targeting India — a nation seen as a crucial counterweight to China — the administration risks alienating a partner it has spent decades cultivating.
“India was supposed to be part of the solution, not part of the problem,” Summers remarked. “If Trump drives Modi into Xi’s arms, that’s a strategic own goal.”
The White House insists the tariffs are about “fair trade.” But officials privately concede the move was also retaliation for India helping Russia circumvent oil sanctions. By going after India’s economy, Trump hopes to squeeze Putin indirectly.
The risk, however, is that Modi doubles down on Russia ties instead of backing away.
Where this goes next depends on whether the US and India can hammer out a compromise. Trade talks are scheduled later this month, but optimism is thin.
Former central bank governor Urjit Patel warned that unless a deal emerges soon, “a needless trade war, whose contours are difficult to gauge at this early juncture, will likely ensue.”
For now, India’s growth story remains intact, buoyed by domestic demand and reform momentum. But the political optics — Modi embracing Xi while Trump hammers tariffs — may prove longer-lasting than the quarterly GDP figures.
