Hidden exposure
Consider the ripple effects that companies may not have mapped. India and Russia have cooperated on military and foreign policy matters for 75 years. Today, India purchases substantial Russian oil, refines it, and exports some to American allies in Europe. President Trump’s very recent threat to impose large tariffs on the $80-90bn of goods India exports to the US targets this relationship. But the real impact extends far beyond direct India-US trade.
Here’s how the cascading risk can unfold for non-American companies. As Washington extends its definition of national security to encompass foreign policy alignment, allied governments face mounting pressure to mirror American trade restrictions. For example, last year, Canada slapped 100% tariffs on Chinese electric vehicles after Washington DC did, and pressure was applied by American diplomats. For their part, European firms operating in India today may get caught up in any copycat EU trade restrictions imposed on India and in New Delhi’s inevitable retaliation.
Moreover, your technology company’s “Indian vendor” likely sources components globally. Your pharmaceutical division’s active ingredients may trace back through multiple BRICS countries and could become subject to retaliatory export restrictions. Your consulting firm’s Delhi office serves clients across Southeast Asia. When trade tensions escalate, these interconnected relationships become corporate vulnerabilities.
India may be in the firing line this week and last, but American actions have a greater reach. Once again, the US has conditioned its trade policy on non-economic objectives – foreign and security policy with India, domestic political factors in Brazil and South Africa, and the contest for global primacy with China (which is the defining geopolitical contest of this age). These steps by the Trump Administration represent interference in foreign nations that America itself would never accept if the roles were reversed.