In a striking episode of global trade diplomacy, U.S. President Donald Trump has reduced tariffs on Indian goods from a proposed 50% down to 18%. This adjustment comes after weeks of tense negotiations and strategic developments that have reshaped relations between the two largest democracies.
Political analyst Ian Bremmer describes such moments as TACO—“Trump Always Chickens Out”—highlighting the president’s pattern of aggressive threats followed by retreat when faced with determined resistance. While Trump bluffs many countries and some succumb, India is not one of them. Prime Minister Narendra Modi has stood steadfast, refusing to yield under pressure, a key reason for the eventual tariff reduction.
Trump initially suggested a 50% duty on Indian exports, alarming businesses across the country. Later, he lowered the proposal to 25%, and after further discussions, the final tariff was settled at 18%. Analysts note this gradual pullback is a textbook TACO moment, showcasing how firm leadership and strategic resistance can yield favorable outcomes.
One factor prompting Trump’s retreat was India’s recent landmark EU trade deal, described by EU leaders as the “Mother of All Deals.” Signed just days before the final U.S. tariff adjustment, the agreement eliminates or reduces tariffs on most EU exports to India and is expected to double trade with Europe by 2032. The deal significantly strengthened India’s negotiating position, leaving little leverage for unilateral U.S. pressure.
Following the tariff reduction, Trump publicly called Modi a “great friend.” Observers, however, note that Trump is generally loyal only to himself and rarely maintains true alliances. The praise, while cordial in appearance, is largely political theatre, acknowledging India’s growing economic influence and Modi’s unwavering stance rather than reflecting genuine friendship.
Modi’s steadfast leadership, combined with strategic international partnerships like the EU agreement, underscores India’s ability to assert its economic independence. The episode highlights how strong leadership, calculated diplomacy, and global alliances can counter threats, even from powerful nations. With TACO dynamics in action, India has positioned itself as a decisive global player, demonstrating that courage and strategy often trump bluster and intimidation.
