Overview: Trump’s Tariff Escalation
On August 6, 2025, President Trump raised tariffs on Indian goods to 50%, citing India’s continued imports of Russian oil and, in his view, indirect support to Russia’s war effort. Industries hardest hit include textiles, gems, electronics, auto components, and more, with textile exports—accounting for 28% of India’s $35B textile trade with the U.S.—particularly vulnerable.
India’s Strategic Response & Broader Implications
Nobel laureate Abhijit Banerjee urged India to critically assess its reliance on Russian oil, suggesting potential diversification to ease diplomatic and trade tensions. Despite the pressure, India remains firm in its strategic autonomy and continues to defend its long-standing relations with Russia for energy and defense needs.
BRICS: From Fragmented to Forged
Trump’s aggressive tariffs across BRICS members are ironically reinforcing rather than weakening the bloc. Members are engaging more closely—economically and diplomatically—to counteract U.S. pressure. At the 17th BRICS Summit (July 2025), governments adopted 126 resolutions targeting enhanced financial, AI, and trade cooperation, and advanced the BRICS Economic Partnership 2030 strategy.
Previously, Trump threatened 100% tariffs if BRICS nations pursued de-dollarisation or adopted a shared currency, further triggering geopolitical frictions. Notably, BRICS has been developing its own payment system—BRICS Pay—aimed at facilitating intra-bloc trade using local currencies, signaling a move away from exclusive reliance on the U.S. dollar.
Key Takeaways
| Impact Area | Insight |
|---|---|
| Indian Economy | Heavy-duty tariff spikes are straining export sectors and raising urgent calls for strategic economic recalibration. |
| Global Diplomacy | BRICS countries are strengthening ties—especially in trade and finance—to better shield against protectionist pressures. |
| Multipolar Momentum | Emerging economies are signalling a definitive shift: reducing dependency on the dollar and favoring collaborative, sovereign financial systems. |
What’s Next?
- Will India shift its energy sourcing away from Russian oil to ease tensions?
- How quickly will BRICS advance financial instruments like BRICS Pay?
- Could this tariff escalation ultimately lead to a stronger, more cohesive Global South alliance?
Sources:
Washington Post,
Reuters,
Times of India
