Modi, Xi Seek Trade Balance Amid U.S. Tariffs and Border Tensions

- Modi, Xi address trade deficit and border tensions in China. - U.S. tariffs on Indian goods reshape Asia’s diplomatic alliances. On August 31, 2025, the Associated Press reported that Indian Prime Minister Narendra Modi and Chinese President Xi Jinping held a high-level meeting in Tianjin, China, during the Shanghai Cooperation Organisation (SCO) summit. In their first significant dialogue since the 2020 border clashes, the leaders addressed several issues that have strained the bilateral relationship. Geopolitical discussions began after the Trump administration imposed a new 50% tariff on Indian goods in response to India's continued purchases of Russian oil. As a result, this economic pressure pushed New Delhi to reassess its foreign policy alignment and paved the way for the meeting between Modi and Xi. During the discussions, Modi raised critical issues, highlighting India's substantial $99.2 billion trade deficit with China and the need for stability along disputed border regions. In response, President Xi Jinping agreed to continue dialogue to resolve these concerns. According to a joint statement released after the August 31 meeting, both leaders affirmed that India and China see each other as "development partners" rather than rivals, signaling their intent to improve bilateral relations and enhance trade cooperation. The Associated Press also reported that Russian President Vladimir Putin played a central role in facilitating this diplomatic effort, holding prior discussions with both President Xi and Prime Minister Modi to foster rapprochement between the two nations. Putin’s involvement is part of Russia’s broader strategy to promote cooperation among nations within the “Global South” narrative as an alternative to the U.S.-led global order. The meeting in Tianjin, which marked Modi’s first visit to China in seven years, was also the first public acknowledgment of efforts to mend ties since the violent border standoff in 2020. In addition, both leaders discussed measures to improve people-to-people connections, including resuming direct flights. However, while the talks signify progress, significant challenges remain. India fears that China's dam construction projects in Tibet may impact water flow in the Brahmaputra River, and Beijing's ongoing support for Pakistan also continues to be an issue.