Former President Donald Trump’s recent remarks at Joint Base Andrews, where he hinted at a looming trade deal with India and forthcoming talks with Pakistan, signal a bold, if precarious, attempt to reshape U.S. economic and diplomatic engagement in South Asia.
His assertion that the United States is “very close” to striking a trade agreement with India, coupled with his confirmation of discussions with Pakistani representatives next week, underscores a high-stakes strategy to leverage trade as a tool for regional stability.
However, Trump’s caveat—that ongoing tensions between India and Pakistan could jeopardize these agreements—highlights the fragility of this approach in a region marked by historical animosity and nuclear risks. While the prospect of trade-driven diplomacy is tantalizing, its success hinges on navigating a web of geopolitical tensions, domestic pressures, and global economic shifts.
The backdrop to Trump’s comments is a region on edge. India’s “Operation Sindoor,” launched on May 7 in response to the devastating April 22 Pahalgam terror attack that killed 26 people, has escalated tensions with Pakistan. The strike, widely seen as a retaliation for cross-border terrorism, has inflamed an already volatile relationship between the two nuclear-armed neighbors.
Trump’s warning that an outbreak of armed conflict could derail U.S. diplomatic efforts is not mere rhetoric; it reflects the sobering reality that South Asia remains a potential flashpoint for global catastrophe. His claim of having “calmed down” tensions through trade diplomacy is bold, if not overstated, and raises questions about whether economic incentives can truly override decades of mistrust and enmity.
The global context of Trump’s remarks is equally critical. The Biden administration’s recent overhaul of global tariffs, which could impose duties of up to 29% on Pakistani exports and 26% on Indian exports, has added urgency to these negotiations. With Pakistan running a $3 billion trade surplus with the U.S. and India facing potential economic headwinds, both nations have strong incentives to secure favorable terms.
For India, the possibility of opening its $50 billion government procurement market to U.S. companies, as reported by Reuters, represents a significant concession that could bolster American investment in a key growth sector. For Pakistan, trade talks offer a chance to mitigate the impact of punitive tariffs and stabilize an economy grappling with inflation and debt.
Trump’s emphasis on trade as a stabilizing force is a departure from traditional U.S. approaches to South Asia, which have often prioritized military and security cooperation. His assertion that “we can’t engage in trade with nations that are firing at one another and possibly using nuclear weapons” reflects a pragmatic recognition that economic interdependence could serve as a deterrent to conflict.
By tying trade agreements to de-escalation, Trump is betting that mutual economic benefits will compel India and Pakistan to step back from the brink. This approach aligns with broader global trends, where economic statecraft is increasingly used to manage geopolitical rivalries, as seen in China’s Belt and Road Initiative or the European Union’s trade agreements with conflict-prone regions.
Yet, the challenges are immense. India and Pakistan’s rivalry is rooted in historical grievances, territorial disputes, and competing national identities, none of which can be easily resolved through trade alone. The recent visits of Indian officials, including Union Minister Piyush Goyal and Foreign Secretary Vikram Misri, to Washington signal New Delhi’s seriousness about securing a deal.
Misri’s meeting with U.S. Deputy Secretary of State Christopher Landau, described by the Indian Embassy as a “great first meeting,” suggests progress on bilateral priorities. However, Pakistan’s economic vulnerabilities and domestic political instability could complicate its ability to commit to a deal that aligns with U.S. expectations. Moreover, any perception that the U.S. is favoring one side over the other risks alienating a key partner in the region.
The global implications of Trump’s strategy extend beyond South Asia. A successful trade deal with India could strengthen the U.S.-India partnership, a cornerstone of Washington’s Indo-Pacific strategy to counter China’s growing influence. India’s emergence as a global economic powerhouse, with a GDP projected to surpass $4 trillion by 2026, makes it an attractive partner for American businesses seeking alternatives to Chinese markets.
Opening India’s government procurement market could also set a precedent for deeper economic integration, potentially influencing other emerging economies to follow suit. For Pakistan, a trade agreement could provide a lifeline to an economy battered by global inflation and domestic mismanagement, while reinforcing U.S. influence in a country critical to stability in Afghanistan and Central Asia.
However, the risks of failure are equally significant. If India and Pakistan cannot de-escalate tensions, the collapse of trade talks could undermine U.S. credibility in the region. A renewed conflict, particularly one involving nuclear posturing, would have catastrophic consequences, not only for South Asia but for global security.
The international community, including China and Russia, would likely exploit any U.S. missteps to expand their own influence in the region. Moreover, domestic political pressures in both India and Pakistan could complicate negotiations. In India, Prime Minister Narendra Modi faces criticism from nationalist factions wary of concessions to the U.S., while in Pakistan, Prime Minister Shehbaz Sharif must navigate a fractious political landscape and public skepticism about American intentions.
Trump’s claim of averting nuclear conflict through trade diplomacy may be premature, but it underscores the potential of economic incentives to reshape geopolitical dynamics. The challenge lies in sustaining momentum amid rising tariffs, regional rivalries, and domestic constraints.
For the U.S., the stakes are high: a successful deal could cement its role as a stabilizing force in South Asia, while failure could exacerbate tensions and weaken its global standing. The international community, from the United Nations to regional powers like China and the European Union, will be watching closely, as the outcome could influence the broader use of trade as a tool for peace.
As Trump prepares to host Pakistani representatives next week, the world must hope that his optimism is not misplaced. The path to a trade deal with India and Pakistan is fraught with obstacles, but it offers a rare opportunity to align economic interests with geopolitical stability.
If successful, this approach could serve as a model for resolving conflicts in other volatile regions, from the Middle East to Eastern Europe. For now, the global community must support these efforts while remaining vigilant about the risks of escalation. In a world increasingly defined by economic interdependence, Trump’s gamble on trade diplomacy could prove to be a masterstroke—or a cautionary tale.