Tariff Twists: Trump’s Latest Move Exposes Strategy, Not Strength

By Sanjeev Oak

Trump’s selective tariff exemptions expose the hollowness of his trade strategy—less about fairness, more about favoritism. By rewarding allies and punishing independents like India, Washington undermines global rules, signaling that economic policy is hostage to political performance.

When policy panders to power, trade suffers—and partners watch the spectacle, not the strategy.

A Strategic U-Turn in Tariff Turf

Amid the ongoing trade war choreography, President Trump last week signed a selective reprieve: tariff exemptions for countries that enter into reciprocal trade agreements with the U.S. The carve-outs, effective from September 8, span over 45 product categories—especially industrial metals like nickel (vital for EV batteries), gold, graphite, pharmaceutical compounds, and select agro-industrial goods. Essentially, it’s a show of flexibility where leverage suits, not principles.

“The U.S. may lower barriers—but only when partners leap through political hoops.”

Diplomatic Debt or Economic Sense?

On paper, exemptions tied to trade deals could be rational. Align reciprocity, reduce deficits, create opportunity. But under Trump’s trade playbook, such offers are transactional bribes. They reinforce a negotiation dynamic where access costs concession, not confidence.

For example, Japan receives tariff relief alongside a massive $550 billion investment pledge. For others, it’s quid pro quo—tariff relief for deals that privilege U.S. interests. It’s policy by performance, not by principle.

India’s Doldrums: Tariffs Without Exemptions

Amid this selective generosity, India remains conspicuously absent. And not by chance. Trump has already imposed draconian 50% tariffs on Indian exports, brandishing India as a strategic cautionary tale. Meanwhile, exemption lists favor aligned partners, leaving India sidelined.

“Selective reprieve is not fair play—it’s geopolitical favoritism in economic drag.”

This creates dissonance: other significant exporters enjoy pathway to tariff relief, while India’s continued strategic autonomy comes at the price of exclusion.

Policy Merits and Pitfalls

Merits:

• Targets goods that the U.S. cannot produce domestically—ensuring supply chains in healthcare, defence, and EV sectors aren’t crippled.

• Bypasses long congressional approval—allowing quick economic messaging without legislative friction.

Pitfalls:

• Undermines the multilateral trading system by privileging deals over rules.

• Spurs global fragmentary trade blocs, where exemptions become bargaining chips, not rights.

• Weakens U.S. moral leadership: fairness measured not by need, but by political alignment.

Global Response: Not the Return of U.S. Leadership

Europe welcomes stable auto tariffs and predictable access—but not the quid-pro-quo model. Asia watches warily: Taiwan and South Korea may gain, India gains little—but all see that, in Trump’s world, strategic alignment trumps consistent policy.

This stance contrasts starkly with EU’s regulatory steadiness or even normative accountability. It pivots the world further toward multipolar trade architecture—a mix of national leverage, regional blocs, and bespoke deals.

“Access today comes with a political receipt—tariff relief is no longer policy, it’s patronage.”

India’s Way Forward

India must reject this transactional calculus. Instead, New Delhi can:

• Deepen trade ties with partners beyond the U.S., especially the EU, ASEAN, and Africa.

• Strengthen indigenous supply chains in pharma, defence, and EV components to reduce dependency.

• Leverage its strategic autonomy—refusing to be bundled in or excluded based on a performative alignment.

When Incentives Aren’t Innovation

Trump’s latest executive order might appear pragmatic, but it’s fundamentally defensive—a tactical escape from tariff backlash, not a commitment to fair access. True leadership requires rule structures, not rebate structures.

India—and the world—deserves trade rooted in predictable systems, not political payoffs. Because in the evolving global economy, credibility matters far more than credit.