tariffs

New Delhi, India — Speaking at an event in New York this week, India’s Foreign Affairs Minister S Jaishankar offered a blunt assessment of Washington: It has been an insensitive partner to India’s concerns over “terrorism”; has warmed to its arch-rival Pakistan; and has pursued “self-centered” trade policies that have disproportionately hurt the Global South.

That tone marks a new edge in how New Delhi is dealing with US President Donald Trump’s administration in Washington, analysts say, on the back of rising bilateral tensions between the capitals.

For decades, India has dealt with divisive issues with otherwise friendly nations quietly behind the scenes, away from spectacle. That has especially been New Delhi’s approach with Washington, where the relationship has broadly enjoyed wide bipartisan support.

However, after months of tensions, New Delhi is adopting a more openly critical tone towards Washington to address the volatility and uncertainty that Trump brings to the White House.

The changing tune in New Delhi also comes at a critical time for Prime Minister Narendra Modi, who faces mounting domestic pressure and criticism from the opposition for allegedly bowing down to US pressure, time and again. On Wednesday, Modi held a telephone call with Trump, which the Indian PM called “productive” — a cold and formal depiction far removed from his description of the US president as a “good friend” in previous years.

Chietigj Bajpaee, a senior research fellow for South Asia at the Chatham House think tank, said that Jaishankar’s remarks “offer a frank assessment” on the current state of the India-US relationship. “Clearly, the shine has come off the bilateral relationship after India was initially among the most optimistic about a second Trump term,” he said.

India’s pain points

Jaishankar addressed frictions between India and the US while speaking at an Asia Society event after the UN General Assembly in New York ended on Monday.

“If I stand back and look at the [India-US] relationship, I note that much of the world has had a more difficult relationship with the US,” he said. “I mean that may not be a consolation, but that’s a reality.”

Trade

Trade has been one of the flashpoints. Washington is India’s largest trading partner, with bilateral goods trade reaching $149.1 billion in 2025; but the relationship remains tilted towards India with a $58.4 billion goods surplus.

Jaishankar started by noting: “Countries should not be so self-centred that you’re in your own world and take your decision and say, ‘Well, it was not my intention to make your life difficult’.”

The minister was partly referring to the economic spillover of the wars in Iran and Ukraine, urging that “sound common sense” should ensure that the basic needs of countries were not neglected.

But then, he referred to the trade negotiations between India and the US, that have so far yielded a roadmap to a deal — but not a deal itself. “Apart from the per capita gap between India and the United States, the nature of production and the nature of society is very different,” he noted.

The agricultural sector has been among the most contested points between the two, where India has kept its market largely closed for decades to safeguard its farmers. “The expectation that it could rapidly move forward was tested against the ground reality, which was much more complex,” he said, adding that “there is more or less an understanding on the trade agreement.”

At one point, India was among the countries facing the worst tariff rates imposed by Trump. After the US Supreme Court struck down Trump’s sweeping tariffs in February, his administration swiftly turned to other tools, including a new 10 percent global tariff. Earlier this month, Trump signed a law under which the US can impose up to 100 percent tariffs on countries like India that purchase Russian oil.

Jaishankar pointed to these changes, noting that the negotiations created “bumps last year for the relationship,” and added that once the deal is closed, it “would contribute to a better relationship.”

Ajay Bisaria, a retired diplomat who served as high commissioner to Canada and Pakistan, and as ambassador to Poland, told Al Jazeera that with Washington, in particular, “India has decided to be more public because there has been a lot of public criticism and a sentiment that the US is bullying India and India has been silent.”

The new 100 percent tariff on India, due to come into effect in less than a month, “is sort of a deal breaker in the relationship right now,” said Bisaria. “If that becomes reality, then all Indian efforts [to reach out to the US] would come under scrutiny.”

‘Terrorism’

But trade isn’t the only challenge in the relationship. A major rupture emerged in May last year, when New Delhi engaged in a four-day war with its bitter neighbour, Pakistan, after an attack by armed fighters in Indian-administered Kashmir killed 26 civilians.

New Delhi was upstaged as President Trump announced a ceasefire, claiming that he threatened both countries with economic damage if they didn’t stop fighting. For India, any question on Kashmir is strictly bilateral with Pakistan, with no room for so-called third-party intervention.

Nevertheless, Trump has gone on to claim dozens of times that he brokered the crucial ceasefire — as recently as at the UNGA in New York — that halted the war between two nuclear-armed neighbours. India took offence to these claims.

On the other hand, Pakistan’s leaders cozied up to Trump, showered high praise, and nominated him for a Nobel Peace Prize. Since then, the relationship between Islamabad and Washington has bloomed, to New Delhi’s obvious irk.

For India, Jaishankar said, “particularly important is the issue of terrorism.”

“As a country, perhaps there are very few countries which have been subjected to the kind of terrorism that we have from a neighbour as part of a deliberate, conscious policy over many, many decades,” Jaishankar said, referring to Pakistan.

“Now, if something which matters so deeply to us, there isn’t enough understanding or appreciation or empathy of that, I think that creates a problem too,” he said, adding that India’s primary concerns are “not fully appreciated” by its partner, the US.

New Delhi’s changing tone while addressing Washington “is a lesson learnt from its experiences,” said Bisaria, the former diplomat. “After the ceasefire issue, the moods changed — and it all became worse.”

Harsh Pant, vice president of the Observer Research Foundation, a New Delhi-based think tank, said that “the obsession with Pakistan in the Trump administration without taking India’s sensitivities into account contributed to the sense that, look, we need to start articulating it.”

“When at the top level, you don’t see reciprocity, then calculations change and decisions are taken to bring differences out in the open,” Pant told Al Jazeera, referring to Jaishankar’s comments.

Domestic Pressure

Indians have been the biggest beneficiaries of the US’s H1B programme which allows hiring of foreign workers with training in specialty fields. But that has come under fire from Trump, under whose watch Washington has raised barriers and fees for applicants, amid growing criticism of the scheme from supporters of his MAGA movement.

“For many years, mobility was seen as an economic gain. Today the economics of mobility and the politics of mobility are at odds with each other, at least in some quarters,” Jaishankar said, referring to Trump’s anti-immigration politics.

“That certainly in public perception is an issue,” the minister said.

Domestic pressure appears to be finally catching up in New Delhi. “Modi is feeling domestic pressure, with key state elections coming up next year, especially amid some anti-incumbency,” said Bisaria. “It dictates that the government’s posture should not be one of taking bullying from the US.”

Pant said issues like migration impact the general public in India, with the world’s largest population. For years, such connections made the US “an attractive partner for a large mass of Indians.” But today, he said,
”the same issues are becoming a negative drag on the relationship.”

“The public mood in India is also changing perceptibly towards the US. And I think the government is articulating that negative sentiment now publicly,” Pant said.

‘Waiting out Trump’

When Trump returned to the White House for his second presidential run, many in New Delhi’s strategic community were optimistic about bilateral relations, because of the US president’s warm personal relations with PM Modi during his first term.

But things unravelled in the coming months.

Still, Chatham House’s Bajpaee said that despite widening divisions between the US and India, “both have not given up on reviving their relationship”.

He pointed to Jaishankar’s remarks that India isn’t singled out in having a difficult relationship with the US. “Rather, the downturn in India-US relations is a reflection of the Trump administration’s transactional and often unpredictable or erratic foreign policy,” he told Al Jazeera.

“This offers a potential off-ramp for an eventual reset in relations. The conclusion of a bilateral trade agreement is a key watchpoint for this,” Bajpaee added.

For New Delhi, Pant said, “it is now just the question of waiting Mr. Trump out.” Though he added, with a laugh, that India is not alone in that queue.

“Everyone is waiting him out. President Trump has little respect for conventions and norms of inter-state behaviour. How do you just deal with that individual?” Pant said.

China said on Monday that a two-month extension of its trade truce with the United States would give both sides more time to assess the implementation of their existing arrangements and discuss further steps to resolve economic and trade disputes.

China’s Commerce Ministry confirmed that the truce would remain in place through January 10, saying the extension would provide a “relatively stable and predictable policy environment” for businesses and allow the two countries to continue their talks.

The extension was among the main outcomes of a summit between Chinese President Xi Jinping and US President Donald Trump in Washington last week, their second meeting this year.

Background

The United States and China have spent years imposing tariffs and other trade restrictions on each other, with tensions extending beyond tariffs to technology, investment, supply chains and market access.

The latest extension follows an agreement by the two sides to establish a trade council that will oversee discussions on a range of economic issues.

One of its first tasks will be to discuss reciprocal tariff reductions covering about $30 billion worth of goods, with the aim of maintaining more stable economic and trade relations between the two countries.

China’s Commerce Ministry said the arrangement would also create better conditions for Chinese exporters seeking access to the US market.

The two sides will hold regular discussions on investment opportunities and barriers, policy transparency and predictability, and concerns raised by businesses.

Why it matters

The extension gives US and Chinese companies more time to operate under a relatively predictable trade environment while negotiators work through remaining disputes.

Agriculture is one of the main areas covered by the latest arrangements. A White House list showed that China plans to reduce tariffs on a range of US agricultural products, including corn, wheat, dairy products and meat, although soybeans were not included.

The proposed cuts appear linked to a US-stated Chinese commitment to purchase $17 billion worth of agricultural products. China has already resumed large-scale purchases of US soybeans under an agreement reached last year that called for annual purchases of 25 million metric tons.

The countries will also establish an agriculture working group under the new trade council, with its first meeting expected before the end of the year.

Energy trade is another part of the agreement. China will import 10 million metric tons of US coal annually in 2027 and 2028, according to the White House. That would account for about 2% of China’s annual coal imports. US liquefied natural gas and oil were not included in the list.

The arrangements extend beyond traditional trade. The two countries have agreed to establish a communication channel for artificial intelligence related incidents and hold another dialogue by the end of November.

China will also consider approving foreign financial institutions, including US backed firms, to operate and open branches in the country. Washington and Beijing will meanwhile continue discussions on increasing direct flights between the two countries.

What’s next

The immediate focus will be on implementing the agreements reached at the presidential summit.

The agriculture working group is expected to meet before the end of the year, while the AI dialogue is due to continue by the end of November. The two countries will also use the new trade council to discuss tariffs, investment, market access and regulatory concerns.

The extension runs until January 10, giving negotiators another two months to evaluate whether the existing arrangements are being implemented and determine what further agreements can be reached.

Whether the two sides can turn the temporary truce into longer-term trade arrangements will depend on progress across the different areas covered by their negotiations, including tariffs, agricultural purchases, investment and technology.

With information from Reuters,

Abbotsford, British Columbia – Every second day, 28,000 litres of raw milk leave Casey Pruim’s farm in Abbotsford in western Canada, entering a distribution system built on the assumption that the milk and the products made from it will have somewhere to go.

While most is consumed in Canada, some had been sold across the border to the United States.

Those sales have largely come to a standstill since US President Donald Trump’s 50 percent tariff on $20bn in Canadian goods, including dairy products, came into effect on August 22.

Pruim, who is also chair of the British Columbia Dairy Association representing about 400 dairy farmers across the province, told Al Jazeera that Canadian farmers do not individually decide which products are exported.

Instead, producers such as Pruim –  whose farm has 330 cows milked three times a day  –  sell into the provincial milk-marketing system, which distributes milk to processors according to demand, including for products exported to the US.

If a processor loses US demand, it may require less milk, with the impact then spread across the provincial pool.

Dylan Kruger, director of public affairs at BC Dairy, told Al Jazeera “there is still considerable uncertainty around the impact of the US tariffs”.

He said it was too early to know how the industry would be impacted or whether milk no longer sold to the US could be sold elsewhere, mitigating financial losses.

But the tariffs and wider trade tensions have already introduced uncertainty and instability for businesses.

“If the processor who’s exporting some of his product to the United States can no longer sell into that market because he’s now priced out of the market with a 50 percent tariff, that’s how it would impact the dairy farm,” Pruim said.

Pruim said if processor demand is squeezed, farmers would be forced to dump the milk. In the worst-case scenario, the herd has to be cut.

“Cows aren’t like a tap; you can’t just turn them on or off,” he said.

His warning captures dairy’s particular vulnerability in a tariff war: Milk is highly perishable, collected on a tight schedule and dependent on processors whose demand can change much faster than farmers can adjust production.

“These tariffs are completely unwarranted,” David Wiens, president of the Dairy Farmers of Canada, told Canada’s CBC News, adding that they would affect “the supply chain, not only in Canada but in the US as well”.

Supply-management system

Dairy trade between Canada and the US has largely operated under a free trade agreement between the US, Mexico and Canada, known as CUSMA in Canada.

Canada manages the supply of dairy, poultry and eggs through a national agricultural policy known as supply management. The system uses production quotas and import controls, including tariffs, to provide farmers with more stable and predictable prices while maintaining domestic supply.

Critics describe the system as protectionist and as a government-backed cartel.

Washington argues that Canada’s supply-management system restricts US dairy exports. Trump posted on Truth Social that “Canada had been ripping off the United States of America for years” and accused it of imposing “ridiculously high tariffs” that made life impossible for US farmers.

Canadian producers reject that argument, saying the existing trade agreement already gives US imports substantial tariff-free access that is not fully utilised.

Canada’s dairy trade deficit with the US has grown significantly since CUSMA came into force on July 1, 2020, according to the Dairy Processors Association of Canada.

In 2020, Canada exported 241.3 million Canadian dollars ($173m) in dairy products to the US and imported 647.4 million Canadian dollars ($462.7m) worth of dairy and dairy products. In 2025, Canadian dairy exports had risen to 308.7 million Canadian dollars ($220.7m) while dairy imports from the US had more than doubled to 1.355 billion Canadian dollars ($968.5m), accounting for 13.8 percent of total value of US dairy exports, according to the association.

Bryan Yu, chief economist at Central 1 credit union, said the immediate shock of losing a major market could be difficult for Canadian producers to absorb because replacement buyers cannot be found quickly.

“There is going to be pain in the near term for a lot of our producers,” Yu told Al Jazeera.

“You really can’t quickly adjust to a 50 percent tariff, because it’s uncharted waters for a lot of industries … and ultimately it shuts [Canadian producers] out, because a lot of them don’t have the margins that they can play with,” he said.

Yu said Canadian consumers might absorb some of the additional supply while exporters search for new markets and higher-value products, but neither adjustment is instantaneous.

“There are global markets as well, especially when you talk about chilled, chilled beef, chilled products and really it’s a question of whether … other types of markets that could be available.”

Canada has also imposed retaliatory tariffs, which came into effect on September 8 and cover $20bn worth of US products.

Dairy products are among the targeted goods. The list includes a 50 percent tariff on milk, cream and whey products and a 25 percent tariff on many cheeses imported from the US.

Canadian Prime Minister Mark Carney has framed Ottawa’s response as both retaliation and an attempt to build greater economic resilience.

Announcing the collapse of the latest negotiations, he said Canada would match Washington’s new tariffs “dollar for dollar” to protect workers, farmers, families and businesses.

But retaliatory measures carry risks of their own.

“Canada’s new retaliatory tariffs will help some industries but hurt most and weaken economic growth across the country by raising costs for producers and consumers,” Oxford Economics said in a report.

For now, geography remains important for perishable goods like dairy products that once moved quickly across the US border and cannot be redirected overnight to a distant market without new buyers, logistics and regulatory approvals.

Ottawa’s Trade Commissioner Service is advising affected companies to check their CUSMA compliance, explore available relief and contact trade commissioners about potential new markets.

Yu predicted that the US and Canada could reach a tariff deal in the following months but said the interim period could bring “higher prices, weaker economic activity and deeper mistrust”.

For Pruim, the uncertainty is as destabilising as the tariff threat itself.

“I think, like [for] any Canadian, it’s disappointing to have these trade talks collapse again and just the uncertainty around it.”

New Delhi says it has ‘made clear’ its determination to ‘protect its trade and economic interests’.

India has warned the United States that new measures to levy tariffs over the purchase of Russian oil could impact ⁠bilateral ties, hours after the US Congress approved a bill that would give President Donald Trump new abilities to punish buyers of Russian oil.

The US House of Representatives on Wednesday passed a sweeping sanctions and tariff bill intended to increase economic pressure on Russia over its invasion of ⁠Ukraine.

The bill targets Russia’s energy and defence sectors, President Vladimir Putin and other senior officials, as well as Moscow’s so-called shadow fleet of tankers used to circumvent Western sanctions.

It also authorises President Donald Trump to impose stiff tariffs of up to 100 percent on countries, including India, to reduce their dependence on Russian oil and gas, and⁠ extend sanctions on Iran.

The bill has been sent to Trump to sign into law.

India’s foreign ministry said on Thursday that it “remains firmly committed to ensuring energy security for its 1.4 billion people”.

The Indian foreign ministry said that it had noted the bill’s passage, adding that New Delhi had raised the issue with various US interlocutors in recent months, and had “very clearly articulated” the potential implications for the bilateral relationship and the international energy market.

“The Indian side has also made clear its determination to take all necessary measures to protect its trade and economic interests,” it said in a statement.

The government would work closely with trade and industry bodies to deal with the legislation’s implications, it added.

India, the world’s third-biggest oil importer, is among the biggest buyers of Russian oil, which is seen as helping Moscow replenish its budget since it launched its full-scale invasion of Ukraine in February 2022 and was hit with ⁠sweeping Western sanctions.

New Delhi has repeatedly sought to resist pressure to reduce its oil trade with Russia, saying its large population and economy need secure, affordable and reliable energy supplies.