The point to note for India is that we must not panic.
The United States may be our largest export destination, but high tariffs will not exactly mean gloom and doom.
Sure, we can throw some morsels as we continue negotiating, but we must be firm that some red lines cannot be crossed, no matter what, asserts Shreekant Sambrani.
On 15 August 2025, Donald J Trump, the 45th and the 47th president of the United States of America, finally exposed himself fully.
Trump watchers -- and there is an army of them out there -- knew it was going to happen one of these days, but given how the world has reacted to him so far, with its tail between its hind legs, it was a surprise that it happened so soon and so swiftly!
No, Trump did not take off his clothes (some consider he is mad enough and quite capable of doing so), but having invited a confrontation with the current Russian czar Vladimir Putin, with hectoring rhetoric for several weeks preceding, it took Trump just one hot August afternoon in the frigid Tundra to show the world what he really is: A bully, who can only intimidate the seemingly weak.
Trump had invited Putin with virtually an ultimatum to declare a cease-fire in the war between Russia and Ukraine, now well into its fourth year, or else face dire consequences of punitive sanctions and Trump's favourite weapon, tariffs.
The two met, Putin even did the American the favour of riding in his limousine, had lunch, held a press briefing where no questions were allowed, smiled nicely at each other, and left for their respective home bases. That's it.
No cease-fire, no blood-and-thunder sanctions or threats thereof, nothing!
Trump ended up mouthing absurd inanities such as 'There's no deal until there's a deal.' He called it a very good meeting, paid compliments to the Russian boss and gave himself 10 on 10 for having achieved 0 on his widely-known agenda.
Pictures of Trump returning to Andrews base late in the evening said it all. No tie, slow climb down the steep stairs of Air Force One, a little stumble even, and a lined, unsmiling face.
Then one realised that a nearly 10,000 km trip within a day, even in the comfort of that fortress in the sky, can beat the living daylights out of a much younger person, what to speak of an out-of-shape 79 year old, especially if there is nothing to show for it.
It required no rocket science to see that Putin was the winner of the day. His smile spoke a million words and the Russian media went to town saying so.
How did one who has been a pariah in virtually the entire world over the last three years or longer, who has lost thousands of soldiers, hundreds of millions worth of military hardware and has merely marginal gains to show for all this in the Ukraine war, manage to turn the tables on supposedly the world's most powerful man, the leader of the richest country, with no opposition to speak of at home and an army of sycophants to do his every bidding?
It seems unbelievable, but it also tells us that Putin has the full measure of his man, he being one among the two in the world to possess such an advantage (no prizes for guessing the second; it is President Xi Jinping of China).
We know what has happened with the face-off between Trump and Xi. China was the early target of Trump's tariff threats. Trump raised the stakes to absurdly high levels, over 100 per cent and rising. And Xi stared him down with matching increases.
As has happened inevitably under such circumstances, talks were proposed and presently, there is a 90-day hiatus.
China fits the picture of a Trump villain perfectly: It is the largest buyer of Russian oil, accounting for nearly half, it does not allow any outside interference in what it considers its domain (such as the South China Sea) and brooks no comments on its internal repression of dissent.
India is singled out by Trump for its purchase of Russian oil and Trump has threatened additional penal tariffs by the end of August. He calls the Indian economy 'dead' (he called the Russian economy dead as well, but surely not any longer!). He also tried to claim the high moral ground by saying that India profits while Ukrainians die.
But Trump does not dare act against China given its economic might. He knows full well that if China were to withhold rare earth magnets, there would be near calamitous consequences for the world, especially the United States.
So he makes no threats, but some soothing noises about negotiations. And the coward that he is, even resorts to extracting what amounts to ransom payments from companies like Nvidia and Intel of 15 per cent of the value of their chip exports to China!
Emperor Xi has an enigmatic smile as he goes about the pressing task of nipping in the bud the incipient dissent at home.
But Putin has no such ace in the hole and yet prevails against Trump! What gives?
For long, there have been whispers about Putin having some dynamite evidence of wrongdoings of Trump from before the time he was a presidential candidate. Now even the venerable Economist has hinted at such a possibility. That would explain how Putin has managed never to respond to Trump's threats and ultimatums and yet quietly win the day in Alaska.
In the classic comic strip Calvin and Hobbes, there is a character, Moe, the big, dim‑witted class bully who seems to exist solely to torment Calvin. Bill Watterson once described him as 'every jerk I've ever known, and in the strip he is instantly recognisable by his shaggy hair, crude lowercase speech bubbles, and a knack for shaking Calvin down for lunch money or delivering a punch when words fail him. Calvin, of course, is the class wimp.
Trump is Moe to the world. But he does not scare the Putins and the Xis. Instead, he beats a retreat -- the latest New YoRk Times reports from Washington, DC say that Trump has backed off the demand for a cease-fire, virtually aligning himself with Putin.
And thereby hangs a tale with a vital lesson for India. Never give in to bullies. Stare them down in a Mexican stand-off. Look at Brazil. The largest South American nation has been the subject of Trump's worst ire. It has been slapped with more than 60 per cent tariffs. No external factors are involved.
The former Brazilian president Jair Bolsonaro is presently under trial for attempting a coup against the present president Luiz Inácio Lula da Silva (Lula, as he is popularly called) after losing the election (much the same way Trump's fanatics tried in January 2020). Trump thinks that is unfair and has punished Brazil with the highest tariffs of any nation in the world. Lula has stood firm and not given in to Trump's tantrums.
As has Cyril Ramaphosa, the South African President. He maintained his dignity as Trump insulted him during his visit to the White House. Trump's grouse is that the South African regime is not fair to the white minority, which for long practiced apartheid. Ramaphosa has drawn a red line, even as Trump has welcomed some white South African immigrants into the United States.
The point to note for India is that we must not panic. The United States may be our largest export destination, but high tariffs will not exactly mean gloom and doom. Some estimates show that the worst case scenario is a weaker rupee and a 0.5 per cent loss in GDP growth.
A weaker rupee will pinch domestically, no doubt, making goods with high import content more expensive -- smart phones, white goods, etc. But that will also make Indian exports to the rest of the world more attractive. And we must remember that we have recently concluded a free trade pact with the United Kingdom and before long, will have another one with the European Union.
Above all, it would be well worth our while to look for markets other than the one controlled by the whims of a wannabe imperialist bully.
Sure, we can throw some morsels as we continue negotiating (even Putin paid verbal compliments to Trump), but we must be firm that some red lines cannot be crossed, no matter what. It was heartening to hear the prime minister signal just such intent in his Independence Day address.
And as for the 0.5 per cent loss of GDP, that amounts to $20 billion annually. On a per capita basis, it is just about $1.50 (the advantage of a large population is in both the numerator and the denominator).
To be sure, it will be felt unevenly -- the shrimp farmers, the garment manufacturers and the diamantaires might be the worst sufferers. But surely the government can work out relief schemes for them.
It is to the credit of four of the original BRICS nations to show that they cannot be bullied. India, the fifth, needs to join them fully and tread the line to the White House gingerly.
© 2025