Tariffs US-China: India And EU Give The Answer As Allies – OpEd

The global community watches in astonishment as the grim scenario unfolds from the relentless blows between the US and China, with Trump and Xi Jinping appearing unyielding in continuing the war. It seems that the two countries have fully entered into a logic of mutual blackmail, pushing the pressure to the core with the imposition of tariffs. Is a new chapter of economic cold war between the West and the East unfolding before us, with consumer goods playing the role of economic ambassadors?

Within this contradictory situation of a globalized economy and globalized trade without globalized consumer goods between the USA and China, the commercial and political role that India will play appears particularly significant.

U.S. tariffs strengthen the rationale for the EU-India agreement based on the assessment of the European Union Ambassador Hervé Delvaux on April 4, 2025. As early as February 2025, European Commission President Ursula von der Leyen and Prime Minister Narendra Modi had been working in this direction, supporting the ambitious goal of completing the Free Trade Agreement by the end of 2025. Negotiations for the trade agreement, which began in 2007, were suspended in 2013 and then revived in 2022.

“India and the European Union have made significant progress on certain aspects of the negotiations for a free trade agreement (FTA) that both sides wish to conclude by the end of the year, with U.S. tariff threats reinforcing the rationale for the deal,” said EU Ambassador Herve Delvaux on April 1, 2025, referring to the 10th round of negotiations and also the first conducted after von der Leyen’s visit.

“The global environment is accelerating negotiations. The reciprocal tariffs from the US strengthen the rationale for a free trade agreement between India and the EU, but they will not dictate them,” he continued, commenting on the threat from US President Donald Trump to impose reciprocal tariffs on trade partners around the world starting April 2.

Delvin referred to several factors for the outcome of the latest round of negotiations between India and the EU, as both are demonstrating strong determination to finalize a free trade agreement. He added that discussions between India and the EU are ongoing to build a substantial trade package that will be mutually beneficial, as both sides “are working to address the key demands and respective sensitivities.”

Delvin did not provide details on these sensitivities that both sides must take seriously, but he seems to imply India’s call for greater mobility of Indian professionals within the European Union and its efforts to protect sensitive domestic sectors such as agriculture and dairy products, while simultaneously providing market access. At the same time, the EU has requested the reduction of tariffs on alcoholic beverages and cars from India’s side.

The Indian side has also expressed concerns regarding the EU’s Carbon Border Adjustment Mechanism (CBAM) as well as the imposition of tariffs on high-carbon products, such as steel and cement, which will come into effect in 2026, describing the CBAM as a concern for a large number of Global South countries.

The EU is India’s largest trading partner in goods. Bilateral trade in goods between them has nearly doubled over the past decade, reaching $135 billion in 2024, while trade in services is worth approximately $53 billion.

Delvin noted that the EU’s trade agreements are fully compatible with the World Trade Organization (WTO). “They are positive and respectable in the long term,” he added. “EU companies are generally willing to invest in India. Addressing technical barriers is a significant incentive for them to increase the level of investment, and a Free Trade Agreement would be an accelerator for this.” Delvin emphasized that the EU seeks to significantly scale up cooperation with India in the fields of clean technology, semiconductors, defense, and security. The report concluded with both sides agreeing to intensify their efforts to advance negotiations to strengthen their relationship, with the next round agreed to take place in New Delhi on May 5.

It is clear that the main economic struggle at this moment is taking place between the USA and China, with the rest of the countries on the planet caught in the middle of the opposing forces imposing tariffs on products from both China and America. Regarding China, Beijing sent a clear message to Washington on Tuesday, April 8, 2025, stating that it “will fight to the end” if Donald Trump proceeds with escalating tariffs against China, characterizing the American moves as “blackmail.”

The strong reaction from the Chinese Ministry of Commerce came in response to Trump’s threat to increase tariffs on imports from China by up to 100% starting Wednesday, following Beijing’s decision to impose “reciprocal” measures on the initial burdens announced by Washington last week.

India, on the other hand, does not plan to retaliate against the imposition of tariffs following U.S. President Trump’s decision to impose 26% tariffs on its products exported to the U.S. market, according to a statement by a government official in New Delhi, who cited ongoing talks to reach an agreement between the U.S. and India.

The government of Prime Minister Narendra Modi is considering a clause in the executive order imposing Trump’s U.S. tariffs that leaves open the possibility of suspending the tariffs for trading partners who “make significant steps to remedy non-reciprocal trade arrangements,” an Indian official said anonymously, as the bilateral talks are confidential.

India is currently handling the game strategically. It is strengthening its relations with Europe and is waiting to calmly face Trump’s aggressive policy. At the same time, it is investing in domestic trade with its own products, as this move is deemed the only commercially safe option in a globalized map where import prices for foreign products are constantly rising. Therefore, the shift of consumers towards building consumption habits based on their own country’s products is a prudent management solution. Could it be that India, with its management, is slowly and steadily being crowned as the economic giant of 1.4 billion people who is awakening and providing the answer to the Chinese trade hampered by successive tariffs?