SCO in Tianjin—Tariffs, Hedging, and the Bazaar of Eurasian Power
Washington’s tariff turn meets Beijing’s bid for “stability” as India hedges and Russia seeks air—inside Eurasia’s marketplace where alliances are thin and leverage is priced daily.
Beijing has staged many summits, but this week’s Shanghai Cooperation Organisation (SCO) gathering in Tianjin carries unusual clarity. Under the bright lights: China’s Xi Jinping as host, Russia’s Vladimir Putin as beleaguered partner, and India’s Narendra Modi as the swing statesman. The backdrop is not a communique but a tariff wall: Washington’s new “reciprocal” regime layering a baseline levy on most imports and—crucially—taking India’s effective rate to roughly 50% on many goods after an additional duty tied to New Delhi’s continued purchases of Russian oil. In one move, Washington has turned trade into leverage. The question is: leverage for whom?
Photo: Press Information Bureau, Govt. of India (PMO)
China’s message is straightforward. Xi is casting the SCO as a guarantor of calm amid economic whiplash—a platform for “peace and prosperity,” in the set-piece phrasing. Russia seeks diplomatic air cover and commercial workarounds. India, the indispensable outlier, is testing whether it can de-ice ties with Beijing—more flights, fewer frictions, a little border de-escalation—without abandoning strategic autonomy or alienating the United States. Around the table the geometry is unconventional: a NATO member (Turkey) sitting comfortably in a forum anchored by China and Russia; Belarus fresh in as a full member, widening the bloc’s European contour. Acronyms multiply—SCO, BRICS, EAEU—but the mood is not ideological. It’s transactional. In Eurasia’s bazaar of power, no one is a friend; everyone is alone.
The tariff shock—and the law of unintended consequences
The new U.S. trade operating system has arrived. A universal “reciprocal” tariff architecture now sits atop the customs code, with country-specific rates replacing decades of patchwork. For India, it’s a double hit: a 25% reciprocal rate plus an additional 25% duty imposed under a Russia-related national emergency, taking the total on many Indian exports to about 50% (with product carve-outs and in-transit exceptions). The White House frames this as hard-nosed reciprocity and national security. Reality is messier. When tariffs become the lingua franca of U.S. statecraft, allies start speaking different dialects.
India’s near-term calculus is economic. Discounted Russian crude has been a boon to refiners and consumers; replacing those barrels quickly is costly. If the price of that energy strategy is a 50% wall on garments, gems, footwear, and furniture, New Delhi must weigh pain for labor-intensive exporters against the structural benefit of cheap fuel and strategic independence. We’ve been here before: in 2019, Washington ended India’s duty-free access under GSP; New Delhi retaliated with tariffs of its own. Today’s escalation is larger and riskier because it collides with a decade of deepening U.S.–India security cooperation.
At Tianjin, this friction isn’t a footnote. It’s the plot. It lends China a clean line: if the United States is unpredictable on trade, Beijing can be predictably pragmatic on logistics and market access. No one here will endorse a Chinese-led order. They will, however, pocket Chinese connectivity and financing while keeping their options open.
India’s hedge: détente without delusion
India’s posture has three parts.
First, compartmentalization. New Delhi will keep working the Quad; anchor defense cooperation with Washington; and deepen technology ties. Simultaneously, it is probing a pragmatic thaw with China—resuming direct flights, airing the lopsided trade deficit, and inching toward confidence-building along the Himalayan frontier. A cold peace with Beijing is cheaper than a hot one.
Second, supply-side nationalism. Tariffs sharpen the push to localize value chains. Expect more incentives for electronics, solar, semiconductors, and defense components; more production-linked schemes; and a faster pivot to non-U.S. export markets in the Middle East, Africa, and Southeast Asia. Energy remains the real lever: if Russian barrels stay discounted, India will keep buying; if U.S. LNG volumes and pricing sweeten materially, New Delhi will buy those too. That’s not defiance. It’s diversification.
Third, diplomatic triangulation. Modi’s Tianjin meetings signal a pause, not a reset. The India–China relationship is structurally competitive and geographically constrained. But even rivals trade; even rivals manage borders. If tariffs have made the U.S. a costlier partner, India will seek price reductions elsewhere—on risk, not on values.
This is what multi-alignment looks like in practice: buy energy from Russia; attract capital from the U.S.; keep talking to China; sell to the Gulf and ASEAN. Bandung 1955 made non-alignment a banner of postcolonial dignity. The 2025 version is a shopping list.
China’s opening: a salesman for “stability”
Beijing’s tone is part statesman, part salesman. Xi’s argument: for all its headwinds, China remains the only player that can convene Putin and Modi in the same room and promise each a measure of normalcy. The SCO’s Astana Declaration last year nudged its remit beyond counterterrorism toward trade, digital finance, and connectivity, with anodyne but telling phrasing about “indivisible security” and paying in national currencies. In Tianjin, hard deliverables are few by design. China wants optics: Putin shaking hands outside the West; Modi smiling, not scowling; Erdogan in the frame; the U.N. secretary-general in attendance. Beijing doesn’t need to “win” India. It needs to show Washington cannot force India to choose.
The Russians are here for air—and optics
For the Kremlin, Tianjin offers two forms of relief. One is diplomatic air cover: photos in a multilateral setting that isn’t the U.N. Security Council. The other is commercial: energy flows, payments, and sanctions workarounds—above all with India. Every ratchet of U.S. tariffs that hits Indian exporters hardens New Delhi’s incentive to keep discounted Russian supplies flowing. In that sense, Washington’s policy compounds Moscow’s hedge. But there are limits: the more Russia leans on China for finance, technology, and markets, the less equal that “partnership without limits” becomes. The SCO’s stage politely ignores those asymmetries; backstage deals do not.
The strange geometry: Turkey, Belarus, and an expanding tent
Two attendance notes matter. Turkey’s presence underscores the SCO’s flexibility in this moment. A NATO member at a China–Russia-led table is not a contradiction; it is a strategy. Ankara hedges constantly—S-400s from Russia, drones to Ukraine, EU customs union, gas corridors—because it lives at the crossroads and profits from traffic.
Belarus’s accession last year widened the SCO’s European footprint. It was a symbolic win for Moscow and an institutional one for Beijing: the more varied the membership, the more the SCO looks like a platform rather than a bloc. Diversity makes coherence harder—but membership easier to sell.
What Washington gets wrong—and how to adjust
Tariffs are a blunt instrument for a surgical problem. If the aim is to limit Russian war financing, the target set is energy flows and price-cap enforcement—not Indian exports of shirts and diamonds. If the aim is to “reshore” manufacturing, the tools are domestic investment, supply-chain alliances, and sectoral incentives—not across-the-board taxes that inflame allies and raise costs at home.
There’s a better play. Pair narrow sanctions on price-cap evasion with carrots for Indian refiners (finance, technology, storage); sweeten LNG and critical-minerals bargains; and use the Quad to build high-trust semiconductor and clean-tech corridors. If Washington wants New Delhi closer on security, it can’t push it away on trade. The red line here isn’t a treaty. It’s trust.
How Tianjin could change the tempo, not the tune
Breakthroughs are unlikely. But tempo matters. A photograph of Xi and Modi discussing trade imbalances; language about more flights; a vague reference to border “stability”—these are signals that India will not let tariffs dictate its map. For Beijing, that’s enough: the SCO looks like a calm harbor; China like a steady pier. For Washington, the message is sobering: strategic compacts can be strained by economic policy that ignores friends’ constraints.
The world that’s emerging is post-bloc but not post-power. Countries bargain issue-by-issue, partner-by-partner. The SCO’s quiet genius is to provide a tent big enough for contradictions. Inside that tent, China pitches predictability; Russia sells defiance; India buys time.
Thin Red Lines Analysis
Thresholds at risk. The most fragile boundary is the U.S.–India compact. Two decades of logistics pacts, defense trade, maritime exercises, and tech ties can be stressed by punitive trade policy. Tariffs don’t break the compact, but they fray it at the most brittle point: political trust.
Escalation ladders. If India’s effective U.S. tariff rate hovers near 50% for months, expect three escalations:
Commercial: Exporters re-route to the Gulf, Africa, and Southeast Asia; India tightens standards that complicate U.S. market access in select sectors.
Energy: Refiners double down on Russian crude unless Washington pairs pressure with incentives; some incremental U.S. LNG is plausible if pricing improves, but the volume gap persists.
Diplomatic: New Delhi increases its time-share in SCO/BRICS fora and subtly moderates Quad tempo to signal autonomy—without abandoning it.
Off-ramps. A tailored carve-out for specific Indian sectors; a phased pathway to restore preferences linked to verifiable price-cap compliance; and an energy package visibly better than the Russian alternative—this is alliance management, not capitulation.
China’s probe. Beijing is testing a boundary too: can it rebrand the SCO as a “safe harbor for sovereign autonomy,” a place where states don’t have to choose? The proposition is attractive to leaders staring at tariff schedules and election calendars. China’s own economic strains and security assertiveness are limiting factors; the harbor is calm, but the tide is still China’s.
Net assessment. Tianjin won’t reorder the world. It will normalize an emerging practice: multi-alignment as market behavior. If the lingua franca of U.S. statecraft is tariffs, China will keep converting alienation into attraction—photo-op by photo-op, corridor by corridor. The line between strategic partnership and strategic transaction is thin. That is where this competition will be won or lost.
Our Take: The red line is the U.S.–India strategic compact. Punitive tariffs risk snapping it. China is probing that boundary by recasting the SCO as a haven for sovereign autonomy. The line looks thin—and contested.