In a surprising shift in US trade policy, President Donald Trump has extended a tariff truce with China while simultaneously imposing steep tariffs on India.
This move highlights a stark contrast in how the US is approaching its two major trading partners amidst ongoing global geopolitical tensions, especially concerning Russia’s oil exports.
Extended Tariff Truce with China
On August 12, 2025, Trump signed an executive order granting a 90-day extension to the tariff pause between the US and China. This pause prevents the tariffs on Chinese imports from skyrocketing from the current 30% to a punishing 145%, which would have almost completely halted trade between the two economic giants. China reciprocated by maintaining its tariffs on US goods at 10%.
This extension followed tense negotiations that saw both sides agreeing to roll back threatened tariff hikes earlier this year to stabilize global markets. Key elements of the deal include China easing certain export restrictions, particularly on advanced technology and critical materials like semiconductors, and the US providing relief to some Chinese companies previously blacklisted on export control and “unreliable entities” lists.
Despite ongoing trade imbalances and disputes over technology and national security concerns, the US administration has described recent talks as “constructive,” with Trump himself stating that relations with President Xi Jinping remain “very good.”
Harsh Tariffs on India Over Russian Oil Imports
In stark contrast to its softer stance on China, the US has slapped India with a combined 50% tariff on multiple goods, including textiles, gems, and chemicals. The tariffs are primarily a response to India’s continued imports of Russian oil, which the US strongly opposes amid sanctions against Russia.
While China also imports Russian oil, the US has so far refrained from imposing similar tariffs on Beijing, choosing instead a more diplomatic approach. The Indian government has condemned the tariffs as unfair and has accused the US of singling out India despite lesser levels of Russian oil imports compared to China.
Trump has warned that other countries could face similar punitive tariffs if they continue to purchase Russian oil, with Vice President JD Vance recently confirming that tariffs on China remain “on the table,” though no decision has been made.
Why the Difference in Approach?
Analysts and trade experts suggest that the US’s differential approach is driven by several factors:
Economic Interdependence: The US and China are deeply intertwined economically, with China being the US’s second-largest source of imports. Imposing extremely high tariffs risks significant disruption to American businesses and consumers, raising costs and potentially triggering a global economic downturn.
Geopolitical Strategy: The US appears focused on maintaining dialogue with China to avoid escalating tensions that could spill over into broader conflict, especially given China’s critical role in global supply chains and technology.
Trade Leverage on India: The harsher stance on India reflects US attempts to pressure New Delhi into aligning more closely with Western sanctions on Russia. India’s refusal to cease Russian oil imports is seen as undermining these efforts.
Diplomatic Calculations: Trump’s administration seems to view China as a partner where negotiation and gradual concessions may lead to long-term benefits, whereas India’s strategic choices on Russia are perceived as a challenge to US foreign policy interests.
Ongoing Issues and Future Prospects
The trade relationship between the US and China remains complicated, with unresolved issues such as China’s export of dual-use technology to Russia and its reluctance to fully open its rare earth magnet exports to the US. Additionally, the US continues to seek American ownership of TikTok, a Chinese-owned social media app facing a potential ban.
Meanwhile, India faces significant economic pressure due to the tariffs, which could impact its trade and diplomatic relations with the US.
The 90-day tariff truce offers a temporary breathing space for both the US and China to negotiate further, but the divergent US policies toward China and India highlight the complex and often contradictory nature of international trade diplomacy in an era of geopolitical uncertainty.
