Raghuram Rajan on 50% Tariffs: Is the ‘Modi–Trump Friendship’ Real? Impact on India, US & China

Froman opened by warning that the multilateral, rules-based trading system built over 80 years is now “effectively dead,” with both the U.S. and China operating outside traditional norms. He noted that while globalization created broad benefits, the costs were concentrated in specific American communities, fueling populism and anti-trade sentiment.

Dr. Rajan added that the breakdown also stems from domestic pressures within advanced economies—especially the loss of manufacturing jobs and the effects of immigration on wages. He emphasized India’s disappointment with recent U.S. tariff decisions, saying they have shaken trust in a partnership India hoped would deepen.

Both experts agreed that China’s overproduction, subsidies, and state-driven industrial policies continue to distort global markets, particularly in electric vehicles and renewable equipment. Meanwhile, other regions—from Africa to Europe—are pushing ahead with new trade agreements even as the U.S. retreats.

Looking ahead, the speakers stressed the need for new, flexible rules, “open plurilateralism,” and coordinated policies on technology, industrial strategy, and national security.