Trump2.0 brings challenges & opportunities for India

The not-so-surprising victory of Donald Trump in the United States Presidential elections has alarmed and pleased leaders around the world in equal measure. For India, too, the return of Trump as the President brings opportunities and challenges in equal measure.

We are living through a great strategic power shift. The emerging international order is likely to be starkly different from what the world has watched in last one decade. With Donald Trump re-occupying the White House, the changing nature of international environment signals an inevitable transformation in which stakes are high for all countries.  As US President, Trump will confront a far more dangerous world than he did during his first term, characterised by intractable wars in Europe and the Middle East, as well as increasing tensions with China over Taiwan. With rising threats from the Chinese Communist Party and its regional allies, President Trump will have his work cut out for him in the Asia Pacific Region.

Trump victory also speaks where the oldest democracy of the world is heading for and where hope and despair is a big misnomer. Now the world will see with a mixture of surprise, curiosity and concern whether his election for a second time will prove as destabilising as many American allies fear. Trump’s victory reveals a transformation within American society and perhaps a wider, global trend, the prioritisation of tangible, short-term outcomes over moral or long-term expectations. 

Trump’s first term, from 2017 to 2021, saw him moving US from the global mainstream to unilateralism with insult and alienation of many of the US longstanding allies. His return to the White House has huge consequences for everything from global trade to climate change to multiple crises and conflicts around the world. We can expect a focus on fair and reciprocal trade, prioritising addressing China’s unfair trading practices, and an unleashing of the United States’ domestic energy potential.

Tump has vowed to end the Russia-Ukraine war within 24 hours of taking office, something that Ukraine and its supporters fear would be on terms favourable to Moscow. However, the Ukraine war, now over 1,000 days old, has become more complicated with the outgoing US President Joe Biden lifting the ban on use of long-range American missiles by Ukraine. Besides Ukraine, Trump has also pledged to end the conflicts between Israel, Hamas and Hezbollah. 

Setback likely for Trans-Atlantic Security Alliance

The existential concern for Europeans over a Trumpian win has been what it would mean for Ukraine, or what it would do to Europe’s security and America’s commitment to NATO.  “Will America be there for Europe?” is a big question that is keeping the European policy makers awake in the night. 

Trump’s victory has also made NATO nervous. He has been a strong critic of the North Atlantic military alliance, accusing its other members of failing to fund NATO and respectfully pull their weight. He is on record to say that the United States would not defend NATO members that don’t meet defence spending targets.  Many European nations have expressed unease at his unilateral approach to international relations, fearing that a lack of cooperation could strain alliances that have historically provided stability.

Trump’s tariff and trade wars 

While Trump may calm the wars on physical borders, a devastating trade war is in the offing. In his election campaign, Trump proposed a wide range of tariffs, including 60 pc on China and 10-20 pc universal tariffs. He recently ratcheted up tensions with America’s closest neighbours, Mexico and Canada, by proposing 25 pc tariffs on their exports to the US also.

Trump cited China’s broken promises to stem the flow of fentanyl, a deadly addictive chemical and he blamed Canada and Mexico for having failed to address the problem of illegal immigration through their borders into the United States. Trump said in a series of social media posts on November 25 that one of his first actions after being sworn into office on January 20, 2025, would be to sign executive orders imposing tariffs on China, Mexico, and Canada. 

No matter how it will impact the global trade scenarios, Trump is likely to make his trade policy an early priority, though implementation may be uncertain. This protectionist stance will reinforce geopolitical and geoeconomic fragmentation. From the time when Trump assumed his first term as President, he has been a forthright advocate of international free trade but with a string, his objective has been what benefits ‘America First’ policy. 

India’s challenge and looking ahead

The big question doing the rounds in New Delhi these days is what kind of opportunities and challenges will Trump2.0 bring to India. Trump will see India with a view of geopolitical complexity in which China will be at the centre. India will need to keep Trump engaged in the Indo-Pacific and remind him that America’s national interest in the Indo-Pacific lies in preventing domination by China. 

As India looks ahead to Trump taking charge in Washington in January, there is optimism that strategic relationship built by the two countries in recent years will further strengthen. India also hopes to benefit if Trump takes a less confrontational approach to Russia with which India has defence collaboration. Maintaining India’s time-tested ties with Russia could become easier under a Trump presidency.

The relationship between the United States and India is strong and dynamic, founded on shared democratic values, strategic interests, robust economic ties, and a vibrant people-to-people connection. During the last Trump Administration, US-India ties fared well despite some real areas of tension. While the past is not necessarily a precedent, we can make some reasonable assumptions about how the bilateral relationship will evolve in the next four years. 

With a second Trump administration, we can expect strong leader-level engagement to help maintain momentum. Indian Prime Minister Narendra Modi was among the first global leaders to congratulate President Trump on his victory, and India is expected to host President Trump and the other Quad leaders for the Quad Leaders’ Summit in 2025. President Trump may occasionally criticise Modi on some issues like India’s “Harley Davidson tariffs”, but there is enough substance on the table to address for mutual benefit. The American approach to relations with India may again shift to become more transactional.

For Washington DC and Delhi, Trump’s return to White House is characterised by strong personal relations with Modi. These will be coupled with a transactional foreign policy where public differences over trade, market access and immigration will have to balance strategic imperatives. The bedrock of the US-India partnership has been shared values and mutual strategic interests. Also, a multi-faceted US-India partnership is underpinned by strong commercial ties, close defence cooperation and shared strategic considerations.

Trump’s “America First” approach sometimes means stepping back from global commitments, including military engagements abroad. While India is optimistic about Trump presidency, New Delhi is also bracing for turbulence in trade ties.

However, despite challenges, New Delhi expect that India will remain a key partner for Washington. Tariffs and Trump’s anti-immigrant rhetoric could also hurt India but Modi-Trump friendship could be a saviour. The US is India’s second largest trading partner and two-way trade last year totalled almost USD 120 billion, with a surplus of USD 30 billion in India’s favour.

The Cabinet announced by Trump is set to reshape America’s international policy which will shake-up the established foreign policies of many countries. The dominant concept of America’s transatlantic relations will thus undergo metamorphosis. Given that unilateralism and “with or without” allies is a belief that Trump has been silently nursing since his first term, the challenge for his administration would be how to create a consulting mechanism capable of dealing with allies without giving the world a sense that it is ready to work on its own.

India is also an important partner as the US seeks to pushback against the military and economic rise of China, both in the Indo-Pacific and beyond. India’s own decades-old rivalry with China further strengthens these shared interests. The desire to counter China’s role in the Indo-Pacific is an area which will be of increasing strategic convergence for the US and India.

During Trump’s first term, key agreements between India and the US included the Communications Compatibility and Security Agreement (COMCASA), Basic Exchange and Cooperation Agreement (BECA), and Industrial Security Annex (ISA). These agreements enhanced military cooperation, intelligence sharing and defence technology collaboration. We should expect significant agreements to enhance their strategic partnership. 

Trump’s pick for Secretary of State Senator Marco Rubio will pay an important role in the US-India relations. His legislative initiative early this year as Senator, the United States-India Defense Cooperation Act of 2024, provides a clear look at his vision for India’s place in US foreign policy. Rubio sees India as a crucial ally in tackling regional threats, especially in the face of a rising China. Should he be confirmed, his leadership could deepen the US-India defence relationship, push forward technology sharing, and bring the two nations into closer military cooperation.

Like Rubio, although many others in Trump’s Cabinet picks are pro-India and want to deepen US-India strategic relations, Trump, being unpredictable, may not offer India full-fledged trade benefits with US. There shall be some hiccups, but it may be more a quarrel among lovers and India can expect things not to flare out of control. It is also possible that in Trump’s during four years in the White House, the US-India FTA negotiation will get some momentum.

Beyond the trade disputes, there are so many other issues that bring the two nations closer. Challenges of Islamic fundamentalism, terrorism will also be Trump’s most important national agenda and the fact that he has picked hardliners in his administration speaks his plans.  

Illegal immigration is a pertinent issue that America has increasingly been worried about in recent years amid record levels of people illegally entering and staying in the country. And, going by the latest data, Indians seem to be a large proportion of these people. The un-documented Indians will face deportation, and it will be interesting to see how Modi will address the issue.  

Dealing with China

Trump’s policy toward China will likely to be similar to the approach during his first term. Trump has already shown a continued fixation on trade and has outlined a plan to impose high tariffs, which will reignite disputes with Beijing over this issue and likely prompt retaliation against US businesses. Trump’s diplomatic approach will always keep others, friends and foes alike, off balance to make a virtue of his unpredictability.

In addition to imposing tariff on Chinese goods and products, Trump will also target China’s Belt and Road Initiative (BRI) project. BRI being one of the important pillars of China’s foreign policy, Pakistan is critical to success of China’s BRI. The China Pakistan Economic Corridor (CPC) under BRI is not progressing well and appears to have become a liability for China, due to political and economic chaos in Pakistan. Trump will allow the country to slip into complete disorder and let Pakistan become a “dysfunctional” state which will severely damage BRI. 

But it is not just China that will suffer. There will be no “free lunch” for Europe as Trump will weigh his trade policy from the view of “Make America Great Again (MAGA)”. This may spark a trade war between MAGA and MEGA (Make Europe Great Again). However, Trump must be very careful because pushing Europe too hard as it may throw Europe in Chinese arms, something that will be a disaster for America. The danger is that if Trump does not take a lesson from globalisation, he will end up Making America Poor Again (MAPA). 

Transformation of global order

What a second Trump presidency would mean for the global order? A ‘deal’ with Putin, tariffs on all imports, targeting Iran. Ukraine might have the most to be worried about. Trump after all has never shown much inclination to support Ukraine. Nor can the words of Trump’s Vice President J D Vance have gone down very well in Kyiv, especially after he told an audience of Republican enthusiasts in July that it was no longer in the American interest ‘to fund a never-ending war’ there. 

The world is in flux, both in terms of the changing global distribution of power and the declining commitment of the United States to the international order. 

A second Trump administration will be different from the first one. When Trump assumes the presidency again in January 2025, he will radically reshape international politics if he keeps his campaign promises. He has made very clear on the campaign trail that he believes major changes to US foreign policy are necessary. He has consistently said that he will dramatically alter or otherwise hamper international agreements, including the NATO security alliance, in ways that could fundamentally weaken the US’s place in the global order. During his first term, from 2017 to 2021, Trump withdrew US from multiple international agreements, including the Joint Comprehensive Plan of Action (JCPOA), often called the Iran deal.

In his second term, Trump has pledged to again withdraw from international agreements and organizations. He has explicitly promised to pull the US out of the Paris Climate Agreement again, after the US re-entered the agreement under President Joe Biden. And Trump could limit US cooperation with UN organisations that his administration was critical of, like the World Health Organisation. 

The fundamental question facing the United Nations Security Council is, do its words mean anything to anyone anymore? Under Trump administration, the reform of the United Nation Security Council would be easier to achieve.     

The European members of NATO are likely to be just as concerned; and even if, as seems probable, Trump is persuaded that NATO is worth hanging on to, as he was during his first term, there is little doubt he will be putting even more pressure on getting Europeans to spend more on their own security. Trump is almost as fixated about the size of trade deficits as he is about the size of crowds at his rallies. 

With Trump’s return to the White House, a geopolitical and geo economical revolutions of historic dimension is underway. Trump’s election had a very visible impact on the climate change negotiations at COP29 that began in Baku barely a day after Trump won the elections. 

The mood in the Climate Summit amongst government leaders, environment activists, climate strategist and global warming scientist was subdued. The world cannot expect Trump to be a sympathetic listener to the impact and challenge global warming as he simply does not believe in global warming. Under Trump administration, it will be ‘business as usual’ for next four years. 

Credibility will have no place in determining America’s foreign policy under Trump 2.0. In addition, he will pursue that moral value has only a limited role in deciding American future. In Trump’s eyes, although America’s idealism remains as essential as ever, its role will be to provide the faith to sustain through all the ambiguities of choice in an imperfect world.