My advice on the U.S.-India deal ... everyone seriously needs to take a deep breath and calm down.
First, the situation was utterly unsustainable, which is why my base case since last August has been that there would ultimately have to be a deal. I've been saying this on @CNBC and in other media for months. I was surprised it didn't happen sooner.
Second, it is, in fact, good news that there has been a deal. If you care deeply about U.S.-India relations and are invested in it, then having the floor fall out, as it did, is bad news. This is good and we should celebrate it.
Third, props to @USAmbIndia Sergio Gor. He has managed to seize the moment since his arrival to reset the tone and move the ball downfield. Well done indeed.
Fourth, 18% is better than 50% but the tariff rate never should have been 50% in the first place and we had better hope it stays here. The President of the United States loves tariffs, full stop. And we should recall that he has used or threatened them for a lot more than just trade disputes. They have been used or threatened now over counternarcotics policy, because he doesn't like country X's foreign policy choices, because he doesn't like how a U.S. company has been treated, because he'd like to roll back other countries' domestic regulatory regimes, because he thinks countries should buy American only, because he wants them to ditch supply chain relationships with third countries, because he doesn't want anyone to do deals with countries that he himself is doing deals with, and even when he objects that others dare to object to his interest in annexing a piece of territory.
In short, tariff "deals" have foundered because he changes his mind or layers on new issues. Don't believe me? Go talk to some South Koreans. Then ask a few Canadians.
But fifth, 18% is a smooth landing for India because if American tariffs are going to be a fact of life then relative advantage over competitors is what matters. A lower tariff rate than ASEAN - most of them stuck at 19% and Vietnam at 20% before we even get to the transshipment issues - is competitively good for Indian exporters.
(As a side note, it’s perversely entertaining that 18 percent is now considered an awesomely “low” tariff rate. "Wow, only 18%!? So cool!!" But I guess taxes are the new normal.)
Sixth, don't sleep on China. Beijing has no realistic chance of reducing tariff rates to prior levels but it doesn't need to - it just needs to get close enough to the ASEAN and India tariff rates to shape the medium-term calculations of manufacturers and complicate all the "China plus X" talk of the last decade. And that outcome hardly seems inconceivable since we are heading for at least two (and maybe more, per Scott Bessent) U.S-China leaders meetings this year and President Trump clearly craves a deal with Beijing.
Seventh, ignore some of the numbers. Sorry, but how is India going to buy $500 billion of anything from the United States anytime soon? U.S. goods exports to India in 2024 were $41.5 billion. U.S. services exports to India in 2024 were $41.8 billion. So a 500% increase from $83 billion to $500 billion seems like, well, kind of a stretch. But U.S.-India trade has undershot its potential forever, so ambition is good.
Eighth, the devil is in the details. I have a hard time believing the government of India is going to make any Russian oil-related commitment explicit. Prove me wrong.
Ninth, and most important: Those of us who care about U.S.-India relations, have worked hard on it, have struggled, and have spent years believing in it should be happier than we were a few months ago. But please, let's not talk as if the last six months never happened or somehow just went "poof" in a magical puff of fairy dust and smoke. International politics and domestic politics are not populated by unicorns and leprechauns living under rainbows, so there really is such a thing as collateral damage. The biggest bipartisan achievement on both sides since the 2000s had been a depoliticized relationship. Because of all that has happened in recent months, this relationship has become politicized again. And after a lot of work was put in by a lot of people over the decades to ensure that third-country relationships to which either side objected did not bleed back into U.S.-India relations (namely, India's relationships with Iran, Myanmar, and Russia, to which Washington often objected; and America's relations with China and Pakistan, to which India often objected), the 25% oil penalty tied to third-country choices set a bad precedent.
Last August, I wrote that these are the three most fundamental facts: (1) domestic politics nearly always trumps foreign policy, (2) foreign policy arguments almost never prevail unless they are anchored by a strong domestic political foundation, and (3) trust is much easier to lose than to build.
I hope the politics get stronger on both sides. And I hope the ceiling of trust hasn't been lowered as much as I think it has.
We're in a better place than we've been since August. Modi and Trump should take the win. Props to Gor and his counterparts. But I still think folks should take a big deep breath and see where we go from here. Here's what I worried about last August: https://t.co/9ImufcXVTh
POV: You’re watching one of the best balls of the 21st century. 🎯🔥
Muttiah Muralitharan’s dream off-spin.
Drift. Dip. Turn.
And absolute disbelief. 😮💨🤯
Guess the Indian batsman. 👀
Is this heart-pounding moment real? A toddler wanders toward an open elevator shaft in an apartment building. A vigilant security guard sprints across the lobby and pulls the child back just in time! 😱🙏
#HeroGuard#SavedInTime#EverydayHero#ViralVideo#IsItReal#AIVideo?
During his visit to Chennai Airport, Sh. Ambuj Sharma, I.A.S, Dy. Secretary, MoCA, interacted with passengers to understand their experience at the airport.
A passenger from Israel rated #ChennaiAirport a perfect 10 out of 10, reflecting high satisfaction with the airport’s overall services and operations.
@MoCA_GoI | @AAI_Official | @PMOIndia | @Pib_MoCA | @narendramodi
During his visit to Chennai Airport, Sh. Ambuj Sharma, I.A.S, Dy. Secretary, MoCA, interacted with passengers to understand their experience at the airport.
A passenger from Israel rated #ChennaiAirport a perfect 10 out of 10, reflecting high satisfaction with the airport’s overall services and operations.
@MoCA_GoI | @AAI_Official | @PMOIndia | @Pib_MoCA | @narendramodi