Trump says open to negotiations to India, but also links tariff ‘penalty’ to BRICS membership

Following his announcement of a 25% tariff rate on India plus an unspecified “penalty” tariff for India purchasing Russian energy and arms, U.S. President Donald Trump said his administration was still negotiating the final tariff rate with India, while at the same time linking India’s membership to the BRICS group of countries as another reason for the penalty.

“Well, we’re negotiating right now,” Mr Trump told a reporter who had asked what the additional penalty for “support to Russia” would be.

“There’s also BRICS. You know they have BRICS, which is basically a group of countries that are anti The United States, and India is a member of that, if you can believe it,” Mr Trump said.

“It’s an attack on the dollar, and we’re not going to let anybody attack the dollar. So it’s partially BRICS, and it’s partially the trade… this trade situation… it’s a deficit, we had a tremendous deficit,” he added.

India and the U.S. are in the process of negotiating a Bilateral Trade Agreement (BTA), a process that was launched in February during Prime Minister Narendra Modi’s visit to the White House. On April 2, Mr Trump announced a “reciprocal tariff” schedule for America’s trade partners — with a 26% rate for India. This was put on hold pending the agreement of a “mini trade deal” initially due to be announced in early July.

On Wednesday, Mr Trump said that the Prime Minister was a friend of his, but that India did not do much business with the U.S.

India sold a lot to the U.S., but did not buy from the U.S., Mr Trump said, blaming high Indian tariffs for this and saying there were among the highest in the world.

The U.S. is India’s largest trade partner and India had a trade surplus of $41.18 billion in the last fiscal year, as per government data. Mr Trump is known not to like trade deficits the U.S. runs with other countries and has based tariffs on the magnitude of these deficits.

“Now they’re willing to cut it very substantially, but we’ll see what happens. We’re talking to India now we’ll see what happens. It doesn’t matter too much whether we have a deal or whether we charge them a certain tariff, but you’ll know at the end of this week,” Mr Trump said.

The President said August 1 (Friday) was going to be a very big day for the U.S., because money was going to “pour into” the country in an unprecedented way.

Asked again if he was open to negotiations with India on the tariff front, Mr Trump said he was.

In a striking blend of diplomacy and coercion, President Donald Trump has signaled a readiness to negotiate with India, even as he links punitive tariffs to India’s membership in the BRICS bloc. The unfolding scenario reveals a high-stakes approach where the promise of dialogue coexists with economic pressure, shaping a complex chapter in U.S.–India relations.

Openness to Trade Talks: A Diplomatic Facade or a Genuine Bridge?

Trump has publicly confirmed that discussions with New Delhi are underway. Describing the situation during a press briefing, he said, “We’re talking to them now. We’ll see what happens,” noting India’s historically high tariffs—some reaching 175% in certain sectors—and expressing hope that India would “cut it very substantially” The Times of IndiaFirstpostIndia TodaymintThe Week. His characterization of Prime Minister Modi as a “friend” added a softer diplomatic tone, even as he lamented the imbalance in trade—“They sell a lot to us, but we don’t buy from them” Firstpostmint. This rhetoric suggests an opening for negotiation, though it remains conditional and politically loaded.

Tariffs as Political Leverage: The Price of BRICS Allegiance

Simultaneously, Trump has wielded tariffs as a strategic tool. In July, he announced a 25% tariff on Indian imports effective August 1, supplemented by unspecified penalties tied to India’s procurement of Russian oil and military equipment—a move he said started the penalty phase FirstpostIndia TodayThe WeekTelegraph India. The U.S. escalated this to 50%—initial 25% plus another 25%—specifically citing India’s ties with Russia amid sanctions from the West The Washington PostReutersWikipedia.

Moreover, Trump has made clear that India’s BRICS membership invites further sanctions. He reiterated that BRICS is an “anti‑US” bloc, intent on undermining the dollar, and that BRICS nations, including India, “will certainly have to pay [a] 10% [tariff]” for their alignment The Times of Indiawww.ndtv.comThe Week.

The Strategic Balancing Act

This dual stance reflects Trump’s broader trade playbook—mixing the carrot of negotiations with the stick of tariffs. He appears to offer a path toward resolution if India concedes on tariffs and perhaps distances itself from BRICS, all while ensuring geopolitical stakes remain elevated.

Global Ripples: BRICS Solidarity and India’s Response

India has responded with measured restraint. Despite the punitive measures, New Delhi has reaffirmed its commitment to national interests and strategic autonomy, particularly in its energy decisions The Times of IndiaReuters. At the same time, India continues to deepen diplomatic and economic ties within BRICS, supporting mutual summit hosting and reaffirming multilateral engagement The Economic TimesTIMEThe Wall Street Journal.

Analysts caution that the tariff-centric strategy may backfire—pushing India closer to other global powers and prompting a shift away from U.S. alignment The GuardianTIMEBarron’s. The narrative has also stirred urgent discussions within India about trade diversification, self-reliance, and regulatory resilience The Economic TimesReuters.

Political Window Dressing or Path to Agreement?

Will these negotiations yield something concrete? Past signals offer reason for skepticism. Reports indicate that while the U.S. withheld tariff-leverage letters from India—raising optimism for a deal—disagreements persist over agriculture and digital trade Politicomint. India continues to lobby for concessions in textiles, pharmaceuticals, and industrial goods, while resisting any coercive trade diktats India Briefingmint.

Final Thoughts

Trump’s negotiation stance and tariff threats portray a calculated gambit: offering talks while setting steep deterrents. The strategy aims to extract strategic concessions by tying economic relief to geopolitical alignment. Yet, this balancing act is perilous. India may choose to engage but on its terms—valuing autonomy over expedient deals.

As tensions unfold, the global community watches. Will Trump’s posture usher in a new trade détente, or will it catalyze a realignment towards a more multipolar world where BRICS and alternative alliances gain ground? Only action—or inertia—from both sides will tell.