For months now, we have been engaged in intense trade negotiations—a subject close to my heart given my long service in the ministry of commerce, including a tenure as India’s ambassador to the World Trade Organization in Geneva. During my time in Geneva, I was involved in brisk, high-pressure negotiations following the ministerial conference at Cancún in 2003. Fortunately, our delegation, led by the suave Arun Jaitley, won all its major points.
The situation deteriorated after Cancún. In conference after conference, negotiations stagnated. India must accept partial responsibility for this stalemate; we were not sufficiently nimble in changing tracks when necessary, nor did we take the lead when opportunities arose. The negotiations eventually ground to a halt—a standstill that was not in India's favour.
Then came Donald Trump. “I don't need international law,” he declared in an interview after his dramatic capture of Venezuelan President Nicolás Maduro at the beginning of this year.
But his war against the established rules-based order began during his first term as US president. On his first full workday in the Oval Office—January 23, 2017—he withdrew the US from the Trans-Pacific Partnership, a powerful 12-nation bloc designed to promote trade rules. He then invoked Section 232 of the US Trade Expansion Act and exploited the rarely-used Article XXI of the General Agreement on Tariffs and Trade to impose tariffs on steel and aluminium from most countries on grounds of ‘national security’.
He dismantled the WTO's dispute settlement mechanism by simply blocking appointments to the appellate body. Consequently, even if a member country wins a dispute, the loser cannot appeal, rendering the enforcement process dysfunctional.
In his second term, Trump came full-tilt at the rest of the world. Last April, he signed an executive order invoking the International Emergency Economic Powers Act, bypassing US Congress to impose sweeping tariffs on all nations. The legality of this action is currently before the US Supreme Court. If the judgement goes against him, the US government would legally be required to refund these tariffs to American importers. While he might revert to Section 232 to maintain the levies, wanton use of ‘national security’ provisions will face stiff resistance. The present belligerence against Iran may well be to justify such national security measures, should his executive order be set aside.
He flexed muscle against China, revoking its permanent normal trade status and relegating it to the same category as North Korea and Cuba, with significantly higher tariffs. The Chinese retaliated by squeezing supplies of critical rare-earth elements vital for semiconductors and military gear and Trump backed down. His administration has also paused a number of key tech security measures that were aimed at Beijing, ahead of a possible April meeting between the two countries’ presidents.
Tariffs on Russia have been high since the Ukraine war. So Trump devised a secondary strategy: levying punitive tariffs on countries that bought Russian oil—the ground on which he imposed a punishing 25 percent on Indian exports. Much to his surprise, Russia did not blink.
Trump thought India would be an easy pick. He first levied a 25 percent tariff on all Indian goods, then added a 25 percent penalty for buying Russian oil. India, however, did not bat an eyelid.
We quietly opened official channels of negotiation while ignoring the provocations of Trump and his henchmen. Subtly threatening the geopolitical balance, we drew closer to Russia and China. As the current president of Brics, a growing bloc, India signalled its potential to form or join a parallel global economic system. Simultaneously, we negotiated with the UK, New Zealand, Oman and the EU, blunting the impact of US hostility by securing favourable terms for labour-intensive industries such as textiles and jewellery.
Meanwhile, economic reality began to bite Trump at home. By the 2025-end holiday season, US consumers faced the impact of his weaponised tariffs. For one, the price for consumer electronics, often gifted in the season, rose 15-20 percent. Forced by domestic pressure, Trump rolled back tariffs on agricultural and marine products, allowing sensitive Indian exports like shrimp and spices to regain markets. Recent reports suggest that the tariffs on steel and aluminium, which were raised in 2025, are also being rolled back.
Ultimately, Trump had to abandon his goal of capturing Indian markets at the cost of our domestic producers. In the recent 'interim' agreement, the US failed to gain access to Indian markets for its major agricultural and dairy products—a primary American objective that would have caused the wholesale extinction of our peasantry had we buckled. Instead, India gained comparative tariff advantages in key sectors like garments and jewellery.
We agreed to progressively lower tariffs on high-end motorcycles, apples, American whiskey and wines. In time, this competition will likely improve Indian products. Perhaps, one day, Indian wines will compete on equal footing with those from Australia or Chile.
We also made a 'motherhood promise' to purchase $500 billion worth of US goods over the next decade. Given our burgeoning requirements in aviation, defence, technology and energy, this is a natural trajectory rather than a forced concession.
Regarding oil, Trump has claimed victory in stopping India's purchase of Russian crude. In reality, Indian firms were already struggling to sustain purchases as sanctions bit harder. Moreover, with the world—and specifically Europe—losing its appetite for the Ukraine war even as Russia advances militarily, the strategic value of oil is shifting. The availability of heavy Venezuelan crude now opens a viable alternative source for Indian refineries.
Just as India seemed comfortably poised, Trump disrupted the equilibrium. He eliminated tariffs on Bangladeshi garments—provided they are made from US-grown cotton. Although Indian cotton is 6-8 cents per pound cheaper, the zero-tariff benefit gives Bangladesh an edge, making its final products cheaper than India's despite higher input costs.
Despite the deal, therefore, uncertainty persists. Trump can overturn agreements whimsically. The world must realise that no deal with the US is safe, underscoring the urgent need to re-establish the WTO's rules-based trading system.
K M Chandrasekhar | Former Cabinet Secretary and author of As Good as My Word: A Memoir
(Views are personal)
(kmchandrasekhar@gmail.com)