Unilateral tariff actions by major economies are reshaping the global trading order. Discuss with reference to India–U.S. trade negotiations.

Unilateral tariffs are import duties that one country imposes outside its WTO commitments, often in the name of "reciprocity" or national security. They are moving global trade away from agreed rules and towards one-on-one bargaining. India–U.S. talks show this clearly. The Bilateral Trade Agreement (BTA) launched in February 2025 was still "not imminent" in October 2026, having been "heavily delayed" by U.S. tariff actions [1].

How unilateral tariffs are reshaping the trading order

• Weakening of MFN (most-favoured-nation treatment): separate "reciprocal" rates for each country are replacing the equal tariffs that WTO members are bound to.
• Tariffs used as leverage: duties are now tied to non-trade goals. The U.S. removed an additional 25% tariff on India after India committed to stop buying Russian oil [2].
• Bilateral deals replace multilateral talks: under tariff pressure, partners strike one-on-one deals instead of negotiating through WTO rounds.
• Policy uncertainty: exporters cannot plan when tariff rates can change by executive order.

How this plays out in India–U.S. negotiations

• Tariff first, concession later: U.S. tariffs on Indian goods rose to 50%. The interim framework of February 2026 cut them to 18% on about USD 30.94 billion of Indian exports [2][3].
• Unequal give-and-take: India agreed to remove or reduce tariffs on all U.S. industrial goods and on farm items such as DDGs (a corn-based animal feed), red sorghum and soybean oil. It also stated an intent to buy over USD 500 billion of U.S. goods [2].
• Red lines defended: dairy, poultry, cereals, maize, pulses and oilseeds were kept in a protected exemption category [3][4].
• Friction remains: after meeting Piyush Goyal at the G20 Trade Ministerial, USTR Jamieson Greer said a "universe of items" was still unsettled [1].

Implications for India

• Gains: market access is restored for labour-intensive sectors such as textiles, apparel and leather [3], and strategic ties get stronger.
• Concerns: cheap feed imports may push down maize and jowar prices. A purchase target that cannot be met could later justify new tariffs. Until a text is signed, India's concessions stay exposed to fresh U.S. tariff action [1].

Way forward

• A signed legal text with a "snapback" clause, so India's concessions can be withdrawn if U.S. tariffs rise again.
• Quotas and an annual review for feed imports.
• Spreading risk through FTAs (UAE, Australia, EFTA, UK) while backing WTO reform.

Unilateral tariffs have made trade a contest of bargaining power, and the India–U.S. talks are a live example. India's approach so far has been to trade market access while ring-fencing its farmers. A signed, rules-based BTA, backed by a reformed WTO, would protect livelihoods and serve SDG 17's goal of a fair, open, rules-based multilateral trading system.