The headlines say Donald Trump is going after India with tariffs. The deeper story is that this is not just about trade. It is about oil, the lingering grip of neoliberal ideology, the BRICS challenge to U.S. dominance — and whether Trump’s brand of economic statecraft can succeed in the face of entrenched interests at home and strategic competitors abroad.
This is a live debate with legitimate views on all sides.
Most industry analysts see it as a story about India buying oil from Russia. Trump promised to end the Ukraine War quickly during his campaign for the U.S. presidency, and he is now frustrated with Vladimir Putin for spoiling those efforts. Eurasia Group’s Greg Brew sees the fight with India as more of a trade dispute over U.S. market access. Indian journalist Shekhar Gupta frames India as the softer target for Trump’s broader grievances with its BRICS partners, Russia and China. Political economist Radhika Desai sees Trump’s strategy as fatally constrained by an entrenched neoliberal orthodoxy. Santiago Capital’s Brent Johnson of and Rabobank’s Michael Every argue the opposite: that the U.S. has already shifted from a free-market to an economic statecraft approach, and that Trump is engineering a structural transformation designed to prepare America for long-term geopolitical competition.
India as Test Case
Trump’s rhetoric is clear: India’s cheap Russian oil imports undermine U.S. sanctions, and his “Liberation Day” tariffs are punishment. But the paradox is glaring. India buys Russian crude, refines it, and sells the petroleum products to the United States. The problem is not just India’s buying habits; it’s the structure of the global oil market and the U.S.’s own dependence on it.
Greg Brew argues that agriculture, not Russian oil, is the real driver behind Trump’s tariff push. The crude trade is a convenient national-security pretext under the International Emergency Economic Powers Act, but the real aim is to break India’s resistance to U.S. farm market access—opening doors for GM crops, ethanol, and other politically sensitive exports—while avoiding the appearance of direct farm-sector protectionism. India’s seafood exports are especially vulnerable, and even if oil tensions fade, agriculture will likely remain the decisive battleground shaping trade relations between the U.S. and India.
Targeting India, Avoiding China
Shekhar Gupta sees Trump’s focus on India as a result of his inability to target China directly. Beijing controls rare earth metals essential to U.S. technology and defense, and it is the largest importer of oil globally, dominating purchases from Russia, the Middle East, and Africa. Restricting China’s access to energy would strike a direct blow at its economy—but it would also harm U.S. corporations embedded in Chinese manufacturing and consumer markets.
India is a softer target, with less capacity to retaliate. Yet another source of friction is New Delhi’s tightening relationship with Moscow and its active role in a BRICS+ bloc that now includes oil giants like Saudi Arabia, Iran and the UAE. While BRICS is not a unified anti-U.S. alliance, it provides a platform to explore alternatives to dollar dominance. The White House has tied such moves to the risk of triple-digit tariffs on actors seen as threatening U.S. financial primacy, making Trump’s tariff strategy as much about countering multipolar economic shifts as about closing trade deficits.
Neoliberalism’s Grip
Radhika Desai’s critique starts with the 1980s birth of neoliberalism — a model built to resolve the 1970s profitability crisis through deregulation, labor suppression, globalization, and financialization. This preserved corporate profitability and elite power but caused wage stagnation, deindustrialization, and instability.
Trump’s “America First” branding may look like a rejection of neoliberalism, but Desai argues he operates within its core logic. His base believes he is battling “the elites,” yet his real backers — tech billionaires, oil magnates, Wall Street financiers — depend on Chinese supply chains and markets. This dependency is the invisible choke-chain that keeps him from confronting Beijing directly. In her view, the tariffs on India are political theater, making a point about Russian oil without challenging the deeper structures of global capital.
Economic Statecraft in Action
Brent Johnson and Michael Every counter that the U.S. has already shifted away from neoliberalism to a neomercantilist model of economic statecraft, where tariffs, industrial policy, strategic subsidies, and tight control over supply chains have displaced the old free-market orthodoxy.
Johnson focuses on the dollar: any global move away from it would trigger deleveraging, strengthening the currency rather than weakening it, and hitting U.S. rivals harder. Every stresses flexibility, with Washington able to run strong- or weak-dollar strategies depending on the geopolitical objective, even using innovations like dollar-backed stablecoins to reinforce dominance. Both argue these strategies require leadership willing to confront entrenched interests and align economic policy with national security goals. In that context, tariffs on India may be seen as part of a layered plan to test partners, shape trade incentives, and signal to rivals that U.S. market access is a weapon Washington will use.
The Missing Energy Strategy
Energy rarely figures into the broader public debate, except as a narrow talking point about India’s purchases of Russian oil. Yet, as Henry Kissinger observed, “Control oil and you control nations.” The real strategic rival is China, now the world’s largest oil importer and dominant buyer of Russian, Middle Eastern, and African crude. If Trump truly wanted to weaken Beijing, constraining its access to energy would be the most direct move. But such a step would inflict collateral damage on U.S. corporations deeply tied to Chinese manufacturing and consumer markets, prompting the administration to exert pressure on India instead — a softer target with far less capacity for retaliation.
This deflection comes with its own risks. U.S. shale production, especially in the Permian Basin, is plateauing (see Figure 1). Rystad Energy projects growth slowing to near zero by the early 2030s, with some plays already in decline. Heavy sour crude — essential for India, China, and much of the developing world — cannot be replaced by U.S. light sweet shale even with costly refinery conversions. U.S. Gulf Coast refineries depend on heavy crude imports.
Figure 1. Infill forecast scenario for oil production in the Permian tight reservoirs.
Source: Saputra et al (2021) and Labyrinth Consulting Services, Inc.
Click on the image to enlarge.
Trump’s fixation on keeping oil prices low undermines the investment needed for long-term supply security. Producers will not fund marginal fields or deepwater projects with depressed prices that the EIA projects to continue and worsen in 2026. Tax credits or Defense Production Act incentives could help bridge this gap, but they have not materialized.
Johnson and Every point out that China’s refining capacity now exceeds America’s, and that the Pentagon is directly involved in securing domestic supplies of rare earths and other critical minerals. Trump has said he intends to keep oil prices low to offset the inflationary impact of tariffs—not as a permanent measure, but as part of a broader strategy to secure state-controlled supply before rivals can lock up essential resources. Most of these initiatives will take years to deliver results. Oil is no exception, but unlike rebuilding U.S. rare earth or semiconductor capacity, ramping up production can yield meaningful gains much faster.
The Real Battleground
Oil is not just another commodity — it’s civilization’s master resource. Whoever controls its flow, price, and access controls more than markets; they control the ability of other nations to act.
Trump talks about energy dominance, but OPEC now sees U.S. shale output falling by 100,000 barrels per day in 2026 — the first real sign that the boom he inherited is losing steam. He’s been aggressive on tariffs and deals, but if he wants maximum leverage over China, he has to push production higher, not watch it plateau.
The tools are there — tax credits, the National Emergencies Act, the Defense Production Act — just as earlier administrations used policy and subsidies to launch tight gas, coalbed methane, and tight oil from shale. The reserves are there too: the USGS says 100 billion barrels of undiscovered oil and 1,300 Tcf of gas remain.
But shale plays are aging, drilling momentum is slowing, and without a coherent plan for the next wave of production, the U.S. risks repeating the U.K.’s mistake of squandering its resource base. Trump understands the link between energy dominance, economic power, and geopolitical clout — but without acting on the supply cliff ahead, trade wars will remain theater, and the next global shock will reveal how much U.S. leverage has already lost.
The fight with India is about far more than tariffs or trade disputes — it’s a front in the larger battle over who controls the levers of power in the system that is replacing the post–World War II order. Oil sits at the heart of that struggle. It’s what keeps the ships moving, the trains hauling, the trucks delivering, the mines digging, and the military running. It powers the physical backbone of every economy. The United States still has it — and the infrastructure, technology, and political leverage to produce more if it chooses. China doesn’t, and that gap shapes the entire strategic equation.
In the post-neoliberal world, the real scoreboard won’t be tariff schedules or GDP growth charts, but who can keep the lights on, keep factories humming, and keep the global arteries of transport and trade flowing when the next systemic shock arrives.
By the same author:
The High Priest of Ecomodernism
and His Dangerous Faith
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ABOUT THE AUTHOR
Art Berman is Director of Labyrinth Consulting Services, Sugar Land, Texas, and a world-renowned energy consultant with expertise based on over 40 years of experience working as a petroleum geologist. Visit his website, Shattering Energy Myths: One Fact at a Time, and learn more about Art here.
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