Forget trying to interpret Trump. Keep your eye on the ball outside of the US
Larry C. Johnson is a former CIA officer and intelligence analyst, and former planner and advisor at the US State Department’s Office of Counter Terrorism. As an independent contractor, he has provided training for the US Military’s Special Operations community for 24 years. Today he runs the website Sonar21
Cross-posted from Sonar 21
Photo source: BRICS
Trump’s attempt to derail BRICS by implementing tariffs is backfiring badly. Instead of convincing India, China and Brazil to separate from Russia and come crawling to Washington to, “kiss Trump’s ass,” Trump’s tariff debacle has resulted in forging closer ties among the BRICS founders. This is especially true with respect to India and China.
India has reacted to Trump’s 50% tariffs with a combination of diplomatic efforts to negotiate exemptions, domestic calls for boycotts and self-reliance, and a defense of its Russian oil imports as essential for energy security. While Modi is shying away from launching verbal bombs at Trump, political and industry voices in India are demanding stronger retaliation, and social media is amplifying growing anti-American sentiment. Economically, India is poised to absorb the tariff hit, leveraging its market size and diversification.
India’s response is strategically cautious, balancing diplomatic restraint with domestic pressures to resist perceived US bullying. The government’s mild rhetoric and focus on negotiations reflect an understanding that escalation could harm $86.5 billion in annual exports to the US, particularly for labor-intensive sectors like textiles and seafood. However, the boycott calls and opposition’s strong language indicate growing anti-American sentiment, which will complicate US-India relations, especially after India’s concessions like allowing Starlink and importing US energy. The tariffs’ economic impact, while significant, is not catastrophic (Morgan Stanley’s $23 billion GDP hit estimate), and India’s measured approach suggests confidence in its economic resilience and geopolitical leverage. Yet, the lack of immediate retaliation contrasts with sentiments on X (e.g., @RT_India_news) advocating for a tougher stance, highlighting a divide between public frustration and government pragmatism.
The tariffs went into effect today (August 27th), which increased to 50% on Indian goods (from an initial 25%) because India continued to purchase Russian oil, have sparked significant economic and political responses. India’s government has adopted a milder tone compared to China or Brazil. The Ministry of External Affairs called the tariffs “unfair” and “unjustified,” arguing that India’s Russian oil imports are driven by market factors and energy security needs for its 1.4 billion population.
Prime Minister Narendra Modi stated that India “will never compromise on the interests of the country’s farmers, fishermen, and livestock breeders,” even at personal political cost. The government has signaled it will take “all actions necessary” to protect national interests, though it has not hinted at immediate escalation or retaliatory tariffs. Modi emphasized self-reliance in a Bengaluru speech, urging prioritization of Indian technology companies, though he avoided naming specific US firms. This aligns with broader efforts to promote domestic brands amid boycott calls. India has defended its Russian oil purchases as essential for energy security, noting that other nations (including US allies) also trade with Russia. This stance is supported by Russia’s Kremlin, which called the tariffs an attempt to “force countries to stop trade relations” with Moscow.
On the diplomatic front, India is coordinating with its BRICS partners (e.g., Brazil and China) to explore legal options through the World Trade Organization, citing “strength in numbers” to challenge the US tariffs. India’s role in BRICS, with its push for local currency trade (e.g., rupee payments for Russian oil), strengthens its economic resilience against US pressure, though this is a long-term strategy rather than an immediate countermeasure.
Meanwhile, anti-American sentiment in India has grown, with social media campaigns and offline movements urging boycotts of US brands like McDonald’s, Coca-Cola, and Apple. A graphic titled “Boycott foreign food chains” circulated on platforms like WhatsApp, listing Indian alternatives to US products. Rahul Gandhi, leader of the Indian National Congress, labeled the tariffs “economic blackmail” and an attempt to “bully India into an unfair trade deal.” This reflects strong domestic political pressure to resist US demands.
Farmer leaders like Gurnam Singh Charuni of the Bharatiya Kisan Union called for a “total ban” on US companies in retaliation, reflecting agricultural sector fears of losses (e.g., $20 billion from US dairy exports flooding the market). The gem and jewelry sector faces potential losses of $3 billion annually, and textile exporters expect $5 billion in business to shift elsewhere due to the tariffs.
India’s stock market showed little panic immediately after the tariff announcement, suggesting confidence in the economy’s ability to absorb the shock. The estimated GDP impact is ~60 basis points ($23 billion) even under a full 50% tariff scenario, significant but not debilitating. India is leveraging its role as a “China-plus-one” destination, with firms like Apple maintaining production (e.g., semiconductors are tariff-exempt).
The biggest unanticipated result of Trump’s attempt to bully India with tariffs is that Modi has moved to set aside longstanding friction with China and seek a closer relationship with China’s President Xi. They are meeting next week in China.
Turning to China. I discussed in a previous post how Trump’s tariffs have killed US exports of soybeans to China and led to a dramatic redirection of coffee bean exports from Brazil — instead of going to the US, those Brazilian beans are now going to China. To make matters worse for another segment of the US economy, China sharply reduced—then nearly eliminated—purchases of US propane and natural gas due to retaliatory tariffs and escalating trade tensions since February. By mid-2025, US energy exports to China, including propane and LNG, had effectively dropped to zero, with China sourcing most of its supply from Russia, Iran, and the Middle East instead.
Consider what has happened to the $4 billion propane and LPG market. In early 2025, China announced and implemented steep retaliatory tariffs (up to 125%) on US propane, slashing imports by 31% in March alone and causing a scramble for alternative Middle Eastern suppliers. Trump’s tariffs rendered US propane noncompetitive: Chinese buyers rapidly replaced US cargoes, leading to a full collapse in trade by summer. The US, once China’s top propane supplier, lost its market share almost overnight, while China’s plastics and petrochemical industries found replacements in the Middle East, Russia, and Iran.
We have seen a similar move with natural gas (LNG), although it is not as financially significant as is the propane trade. By June 2025, US LNG exports to China had also halted, partly because of similar tariff and trade obstacles. China increased imports from alternative sources, notably Russia and other non-Western partners, cementing a broader energy decoupling from the US. This abrupt drop in US sales deeply impacted American exporters, as China had been a key growing market until trade hostilities escalated.
So, if you are keeping score at home, Trump’s tariff policies have screwed American farmers who grow soybeans and corn, and has hurt producers of propane, LPG and LNG. I don’t think those sectors of the economy believe that Trump is Making Them Great Again.
Oh, news from one more damaged sector of the US economy… but this is not about tariffs. Did you pay attention to Trump’s announcement on Tuesday that he was approving 600,000 visas for Chinese students to attend American colleges and universities? Why did he do that? Because he was getting enormous pressure from lobbyists for those US academic institutions, who are hemorrhaging foreign students since Trump’s crackdown of foreign students. It turns out that the Chinese students usually pay full freight. In other words, they are a profit center for cash-strapped academic institutions. Trump’s crackdown on foreign students earlier this year has created a financial crisis for several academic institutions. I think that Trump’s move on the visa front comes too-little-and-too-late.
Be the first to comment