Modi and Xi to Tackle Trade Amidst 50% US Tariffs at SCO Summit

Indian Prime Prime Minister Narendra Modi and Chinese President Xi Jinping are slated to meet this weekend on the sidelines of the Shanghai Cooperation Organization (SCO) summit in Tianjin, China. Trade discussions are poised to be "front and center" during their highly anticipated bilateral engagement, as noted by Squawk Box. This meeting comes at a pivotal time, shaped by recent US tariff impositions that have strained India's economic relations with the West.

The urgency for these trade talks is underscored by the United States' decision to impose a 50% tariff on Indian goods, comprising 25% import duties and an additional 25% levy on India’s purchases of Russian oil. This move, aimed at pressuring New Delhi over its energy transactions, has prompted India to seek stronger economic alignment with other major powers. China faces similar tariff pressures from Washington, creating a shared context for the two Asian giants.

The SCO summit, running from August 31 to September 1, 2025, marks Prime Minister Modi's first visit to China in seven years, following a period of strained relations. The gathering in Tianjin is anticipated to be the largest in the SCO's history, bringing together leaders to discuss regional security, economic cooperation, and the organization's development strategy through 2035. Discussions are expected to include the "Tianjin Declaration" and the "SCO Development Strategy for the Next Decade."

Despite lingering tensions from the 2020 Galwan Valley clashes along their disputed Himalayan border, India and China have recently engaged in diplomatic efforts to normalize ties. These include agreements to resume direct flights and discussions on border trade, signaling a pragmatic approach to de-escalation. The meeting offers a crucial platform to address market access for Indian goods and potential Chinese investments in non-strategic sectors.

Council on Foreign Relations President Mike Froman highlighted the broader geopolitical implications, suggesting the meeting could signify a "major turning point" for India-China relations amidst deteriorating US-India ties. While significant breakthroughs may be modest, the very act of the two leaders meeting is seen as a vital step towards a potential "reset." The summit will also test the "global south solidarity" in the face of Western economic pressures, though internal contradictions within the SCO itself remain a challenge.