Trump’s BRICS barb rattles India-US trade deal hopes as new tariff wave rolls out

US President Donald Trump’s sharp remarks targeting BRICS nations have sparked fresh uncertainty over the long-delayed India-US trade deal, just months ahead of its anticipated conclusion.

On Tuesday, the Republican frontrunner threatened a fresh 10 per cent tariff on countries “aligning with the anti-American policies of BRICS,” pointing to moves challenging the dominance of the US dollar.

While leaders from both India and the US have consistently assured that bilateral trade ties remain strong and a deal is expected by fall, Trump’s latest warning followed by a harsh 50 per cent tariff on Brazil has cast a long shadow over those plans.

Irony follows optimism as Trump issues fresh tariff list

Ironically, the warning came a day after Trump claimed he was close to finalising a trade agreement that could exempt India from a 26 per cent reciprocal tariff currently in place.

On Wednesday, Trump followed up with a new round of levies targeting 14 countries. Brazil has been hit the hardest, facing a punitive 50 per cent tariff on several products, including copper. Other countries on the list include Algeria, Libya, Iraq, and Sri Lanka (30 per cent tariffs), Brunei and Moldova (25 per cent), the Philippines (20 per cent), and others across Asia, Africa, and Eastern Europe.

India stays cautious, eyes potential trade advantage

India, notably, has been spared the brunt of these measures so far. According to a report by Arihant Capital, this could work in India’s favour by making it a more attractive destination for foreign investment and supply chain diversification amid shifting global trade dynamics, reported by ANI.

“India may benefit from relatively lower tariffs compared to many APAC nations,” the report stated, adding that ongoing bilateral agreements and trade talks including the recently signed UK-India Free Trade Agreement and ongoing EU negotiations could strengthen India’s manufacturing ecosystem.

Still, the PM Modi government is treading carefully. Eariler, senior diplomat P Kumaran in a press conference, confirmed that Prime Minister Modi and Brazil’s President Lula da Silva “had no discussion” on the issue during the former’s visit to Rio for the BRICS summit.

Indian industry ready for any outcome

Industry leaders, too, appear cautious but prepared. “There is no compulsion,” said Rajiv Memani, president of the Confederation of Indian Industry (CII), in response to the trade tensions. “India will only do this deal when it is in India’s and America’s interest.” He stressed that extensive consultations have been held across sectors to ensure national interests are not compromised.

However, Trump’s escalating tariff rhetoric and the August 1 deadline for implementation continue to keep New Delhi on edge, particularly with the broader implications for global supply chains and India’s geostrategic balancing act between Washington and BRICS allies.