South Asia today stands among the world’s most dynamic regions—economically buoyant and yet marked by inequality, demographically young, and increasingly assertive on the global stage. For the United States, the region’s geostrategic value is undeniable: it sits at the intersection of critical maritime routes, borders both China and the Middle East, and is home to a quarter of the global population. Yet, successive U.S. administrations have struggled to articulate a cohesive and effective South Asia policy. What has often passed for strategy has largely been a fragmented set of bilateral relationships and episodic engagements.
Under President Donald Trump’s second term, ambiguity has given way to a much more direct and transactional approach. For South Asia, this shift comes at a pivotal moment. The region is grappling with internal political, security, and economic challenges while being pulled into the centre of an intensifying U.S.-China rivalry. The region must now adapt swiftly to a recalibrated U.S. posture that no longer assumes continuity, favours hard-nosed bargaining, and seeks clear returns on partnership rather than open-ended commitments.
The Economic Edge and the Price of Imbalance
President Trump’s return to the White House has been defined by a renewed focus on correcting trade imbalances and reciprocity and using economic tools not only to protect U.S. interests but also to project strength and assert influence in international relations. His “Liberation Day” announcement of sweeping reciprocal tariffs was emblematic of this priority, impacting several South Asian economies that have long benefited from access to the American market. India, anticipating such a move, acted early to hedge against the fallout, as examined below. Other South Asian nations, however, were caught slightly off guard by the steep tariffs placed on them.
India has become the linchpin of the U.S. Indo-Pacific strategy, particularly within the framework of the Quad. Its strategic relevance spans counterbalancing China, securing maritime commons, and building resilient supply chains. Yet, this elevated role did not exempt New Delhi from President Trump’s economic pressure. The long-standing U.S.–India trade deficit remains politically sensitive in Washington.
