‘Clearly a low moment’: US-India relationship sours as new tariffs kick in

illuminem summarises for you the essential news of the day. Read the full piece on POLITICO or enjoy below:

🗞️ Driving the news: The U.S. has imposed a new 25% tariff on Indian imports — doubling the rate to 50% — as part of an effort to pressure Russia by targeting one of its top oil buyers
• The move comes despite diplomatic signals suggesting warming ties, including the recent appointment of Sergio Gor as U.S. ambassador to India
• The tariffs have been condemned by Indian officials and are straining relations between Washington and New Delhi

🔭 The context: India has maintained deep economic ties with Russia, notably becoming its second-largest oil purchaser after the Ukraine invasion
• The U.S. has sought to use economic leverage to curb Russian revenues, but while it has refrained from penalizing China, India has become the focus of targeted trade actions
• This decision risks unraveling recent progress in U.S.-India ties, including strategic coordination through the Quad alliance and plans to double bilateral trade to $500 billion by 2030

🌍 Why it matters for the planet: Strong U.S.-India relations are critical to advancing global clean energy partnerships, supply chain resilience, and climate cooperation within the Indo-Pacific
• A breakdown in trust could weaken joint efforts on decarbonization, technology transfer, and multilateral climate diplomacy, particularly through forums like the Quad and G20
• Moreover, pushing India closer to Russia and China could realign key climate and trade alliances

⏭️ What's next: The two nations may seek to de-escalate at the upcoming UN General Assembly in September, where Trump and Modi could meet in person
• India is reportedly trimming Russian oil imports modestly, but has shown no intention of cutting ties with Moscow
• With U.S. tariffs now nearing parity with those on China, trade talks are likely stalled unless concessions emerge
• The broader geopolitical risk includes weakening of Western coalitions in both economic and environmental spheres

💬 One quote: “If left unchecked, these could erode two decades of strategic convergence.” – Syed Akbaruddin, former Indian ambassador to the United Nations

📈 One stat: India’s tariff rate on U.S. goods now stands at 50% — nearly matching the 55% levied on Chinese goods — after the two-stage hike imposed by the Trump administration.

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