When Tariffs Backfire: How U.S. Pressure on India Strengthened BRICS and Challenged Dollar Hegemony

A Miscalculated Move The imposition of tariffs has long been a political tool in the United States, used as both a domestic economic shield and a weapon of foreign policy. Successive administrations, Republican and Democrat alike, have turned to tariffs whenever they sought to project strength. However, when Washington chose to target India with tariff restrictions on key exports, the move marked not just another trade skirmish but a strategic blunder of historic proportions. Rather than weakening India, the tariffs have had the opposite effect: they have contributed to higher inflation in the U.S. economy, accelerated the global shift toward BRICS, and given unprecedented momentum to de-dollarization efforts worldwide. Most importantly, the tariffs have failed to coerce India into compliance. Instead, under the leadership of Prime Minister Narendra Modi, India has stood its ground, asserting its independence and refusing to buckle under American pressure. This article takes a detailed look at how these tariffs hurt the U.S. far more than India, how they reshaped the global economic order, and how Narendra Modi’s leadership has positioned India as a rising pole of confidence in a multipolar world. The U.S. Tariff Strategy and Its Historical Context The U.S. has historically relied on tariffs as a protectionist measure. In the early 20th century, tariffs were imposed to protect domestic industries from foreign competition. But in the post-Cold War era, tariffs became less about economic policy and more about strategic leverage. They evolved into tools of coercion, used against rivals and allies alike, often under the guise of “national security” or “fair trade.” India became a target of such measures in the 2010s and 2020s, with the U.S. withdrawing preferential trade status under the Generalized System of Preferences (GSP) and later expanding tariff barriers on Indian exports ranging from steel and aluminium to textiles and pharmaceuticals. Washington believed India, reliant on U.S. markets, would cave in quickly. Instead, it triggered long-term consequences that weakened America’s economic standing. The Negative Impact on the U.S. Economy Supply Chain Disruptions The first and most immediate consequence of these tariffs was disruption in U.S. supply chains. India has long been a reliable supplier of affordable goods—from generic pharmaceuticals to IT-enabled services, from machinery components to textiles. With tariffs in place, American companies faced sudden cost escalations, leading to higher expenses that were inevitably passed on to U.S. consumers. Impact on Key Sectors Healthcare: India is the world’s largest supplier of affordable generic drugs. Tariffs and restrictions made essential medicines costlier in the U.S., straining an already fragile healthcare system. Technology & IT: Tariffs on Indian hardware components slowed down tech production cycles, hurting competitiveness in Silicon Valley and beyond. Textiles & Retail: U.S. retailers, heavily dependent on Indian fabrics and garments, faced rising costs, squeezing margins and pushing prices higher for consumers. Loss of Competitiveness By cutting itself off from cost-efficient Indian supply chains, the U.S. ceded competitive ground to Europe and East Asia, who stepped in to strengthen their trade ties with India. American businesses, which once lobbied for “friend-shoring” with India, suddenly found themselves disadvantaged. Tariffs as Imported Inflation Tariffs are often sold to the domestic public as a “protection for local jobs.” But in reality, they act as a tax on consumers. By raising the price of imports, tariffs fuel inflation across the board. In the case of India, the scale was unprecedented. Everyday goods, once sourced affordably from Indian suppliers, became expensive. Small and medium enterprises in the U.S., which relied on Indian exports, saw their costs skyrocket. The result was simple: the American consumer bore the brunt of Washington’s misguided policy. This tariff-induced inflation came at a time when the U.S. economy was already struggling with post-pandemic shocks, rising energy prices, and interest rate hikes. Rather than stabilizing, tariffs worsened inflationary pressures, leading to higher costs of living, falling purchasing power, and widespread dissatisfaction among middle-class Americans. How India Turned Tariffs into Opportunity While the U.S. economy absorbed the shockwaves, India turned the situation into an opportunity to diversify markets and strengthen its strategic autonomy. Pivot to BRICS and Global South: India deepened ties with BRICS partners, particularly Russia, China, and Brazil, expanding trade in local currencies. Strengthened Ties with Europe & ASEAN: While the U.S. shut its doors, Europe and ASEAN opened theirs. Free trade agreements and expanded partnerships gave India alternatives to offset U.S. restrictions. Boost to Atmanirbhar Bharat: The tariffs further energized India’s self-reliance movement, encouraging domestic industries to innovate and reduce dependency on foreign markets. In effect, U.S. tariffs failed to isolate India and instead accelerated its rise as a resilient global economy. Strengthening of BRICS Perhaps the most significant unintended consequence of U.S. pressure was the strengthening of BRICS. Washington underestimated the momentum of a multipolar order. By attempting to bully India, it inadvertently pushed New Delhi closer to its BRICS partners. BRICS Expansion and New Confidence Under Modi’s leadership, India played a pivotal role in expanding BRICS influence—welcoming new members from the Global South and shaping the bloc into a credible alternative to Western-led institutions. A Platform of Resistance BRICS became a platform for resisting unilateral Western policies. The bloc emphasized cooperation, currency swaps, and economic independence, laying the groundwork for reducing reliance on the U.S. dollar. De-Dollarization – The Unintended Consequence One of Washington’s gravest miscalculations was ignoring the global consequences of weaponizing tariffs and the dollar simultaneously. As tariffs hit India, more countries recognized the danger of overdependence on a single currency. India’s Role in De-Dollarization India began settling trade deals with Russia in rupees, explored yuan and ruble settlements with BRICS partners, and actively promoted the use of local currencies in South-South trade. Global Momentum Countries in Africa, Latin America, and Asia followed suit, accelerating the shift toward a multipolar currency system. Every tariff, every sanction, and every dollar-based penalty imposed by Washington only eroded trust in the U.S. dollar further. Decline of U.S. Power Status The tariffs meant to project strength did exactly the opposite. They revealed a United States insecure about its global position. By using economic coercion against allies like India, Washington signaled desperation rather than dominance. Loss of Credibility: Global partners began to view the U.S. as unreliable and overbearing. Erosion of Soft Power: Instead of promoting freedom and democracy, Washington projected protectionism and unilateralism. Accelerating Multipolarity: The tariffs highlighted America’s decline, giving momentum to a multipolar world where no single power can dictate terms. Narendra Modi – Standing Tall Against Bullying Through it all, Prime Minister Narendra Modi emerged as a symbol of strength and sovereignty. Unlike leaders of the past who might have bowed under American pressure, Modi projected unwavering confidence. A New Voice for the Global South Modi’s refusal to yield turned India into a voice for countries across Asia, Africa, and Latin America that were long subjected to Western economic bullying. His leadership demonstrated that nations could pursue their interests without compromising sovereignty. Domestic Strength, Global Respect By standing strong, Modi not only reinforced India’s global reputation but also strengthened his domestic base. Indians saw in him a leader who refused to bend, refused to be cowed, and stood tall for national dignity. Lessons for the World The U.S.-India tariff war is not merely an economic episode; it is a lesson for the global order. It shows that: Tariffs are outdated tools in a world of complex interdependence. Coercion leads to resistance, not compliance. The multipolar world cannot be bullied into submission. Leaders like Narendra Modi, who blend pragmatism with sovereignty, can reshape international relations. A Blunder That Redrew the Map The tariffs imposed on India were meant to showcase American strength but instead revealed American vulnerability. They hurt the U.S. economy, fueled domestic inflation, strengthened BRICS, and accelerated de-dollarization. Most importantly, they failed to intimidate India. Instead, under Narendra Modi’s resolute leadership, India emerged stronger, more confident, and more central to the multipolar order. Washington’s miscalculation has become a turning point in world politics, one that will be remembered not as America’s triumph, but as the moment its grip began to loosen. The world is watching, and the message is clear: the age of unilateral bullying is over, and India is leading the way into a new era of sovereign equality.