{"id":43802,"date":"2025-10-30T12:14:00","date_gmt":"2025-10-30T11:14:00","guid":{"rendered":"https:\/\/www.roncucciandpartners.com\/?p=43802"},"modified":"2025-10-30T12:18:52","modified_gmt":"2025-10-30T11:18:52","slug":"the-asian-axis-when-enemies-become-partners","status":"publish","type":"post","link":"https:\/\/www.roncucciandpartners.com\/en\/2025\/10\/30\/the-asian-axis-when-enemies-become-partners\/","title":{"rendered":"The Asian Axis: When Enemies Become Partners"},"content":{"rendered":"

How Trump’s tariffs are rewriting trade dynamics between India and China<\/strong><\/h2>\n

Are we approaching the \u201cPost SCO Era\u201d?<\/em><\/h2>\n

A paradox is reshaping the global economic map<\/strong>: Donald Trump’s aggressive policies have achieved the opposite of their intended effect, pushing two historic rivals\u2014India and China\u2014to do the unthinkable. Forge a commercial alliance.<\/p>\n

The Affront that Unites<\/strong><\/h3>\n

The escalation was brutal. Washington imposed 25% tariffs on Indian goods on August 1, 2025, doubling them to 50% on August 27<\/a>.<\/strong> Similar measures hit China. Beijing’s response was swift.<\/p>\n

On September 8, 2025, during commemorations of the 80th anniversary of China’s victory over Japan, Chinese Ambassador to New Delhi Xu Feihong launched an unprecedented appeal:<\/p>\n

“The United States uses tariffs as a weapon to extract exorbitant costs from various countries. For a long time, the US benefited from free trade. But now they are using tariffs as a tool.”<\/em><\/p><\/blockquote>\n

The proposal is audacious: India and China should join forces against what Xu calls “unfair and unreasonable” trade policies<\/strong><\/a>. For the first time in years of military tensions along the Himalayan border, Beijing is proposing to New Delhi a united front.<\/p>\n

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The numbers speak volumes:<\/p>\n

“We have 2.8 billion people, mega-sized economies, mega-sized markets, and hardworking people. Our economies are complementary.”<\/em><\/p><\/blockquote>\n

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A market that dwarfs any other trade bloc.<\/p>\n

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\"Sfondo<\/p>\n

The Meeting that Changes Everything<\/strong><\/h3>\n

Only in 2020, the two countries clashed in the Galwan Valley with 20 Indian soldiers killed. Five years later, on August 19, 2025, came the announcement no one expected: India and China signed a historic agreement to resume direct flights, reopen border trade routes, and encourage bilateral investment flows.<\/strong> Three new cooperation mechanisms were established to manage border issues.<\/p>\n

But it was the August 31 meeting between Xi Jinping and Narendra Modi, on the sidelines of the Shanghai Cooperation Organization summit, that marked the real turning point. Xi declared that both countries are in\u00a0“a very special phase of development”<\/em>\u00a0and need\u00a0“mutual support, mutual complementarity, and mutual success.”<\/em><\/a><\/p>\n

Modi responded with a phrase destined to make history:\u00a0“India-China cooperation will make the 21st century a true Asian century.”<\/em><\/p>\n

In Asian diplomatic lexicon, these words are as good as contracts. And the markets know it.<\/p>\n

The Hidden Treasure<\/strong><\/h4>\n

Bilateral trade has already reached a record $136.2 billion in 2023<\/strong><\/a>, marking a 1.5% increase from the previous year. For the fourth consecutive year, exchanges exceed $100 billion, with $127.71 billion in fiscal year 2025.<\/p>\n

Yet, it’s what’s unsaid that reveals the real opportunities<\/strong>. Chinese investments in India? Just $2.5 billion since 2000, making China only the 22nd foreign investor as of September 2024. A colossal anomaly that the new understanding could rapidly correct. India’s trade deficit of $99.21 billion in 2024-2025 tells a story of imbalance that demands rebalancing\u2014and therefore opportunity.<\/p>\n

The possibilities are concrete and immediate<\/strong><\/h4>\n