On the global stage in late August 2025, a sharp war of words and policies is playing out between the United States, China, and India, with the economic and political consequences rippling far beyond their borders. At the heart of the matter are two interconnected stories: the shifting balance of economic power toward China and the intensifying debate over India’s role in the ongoing Russia-Ukraine conflict.
Dean Baker, writing on August 29 for CounterPunch and Pearls and Irritations, paints a sobering picture of the United States’ current trajectory. He contrasts the optimistic rhetoric of former President Donald Trump—who claims the economy is booming, prices are falling, and global peace is within reach—with the stubborn reality of rising inflation, a stalling economy, ongoing wars, and gas prices hovering above $3 a gallon. Baker’s critique is pointed: “In the real-world inflation is increasing, the economy is stalling, wars are continuing, and gas costs more than US$3 a gallon.”
Against this backdrop, Baker highlights a much larger trend: the International Monetary Fund (IMF) now projects that by the end of this decade, China’s economy will be nearly 50% larger than America’s. “There is not much that the US can do about this large and growing disparity,” Baker notes. He argues that the US must adapt to a world where it is no longer the dominant economic power, suggesting that cooperation—particularly in healthcare and clean energy—could benefit both nations and the world at large.
Yet, according to Baker, the Trump administration has chosen a different path, moving “180 degrees in the opposite direction.” One of the most controversial moves has been the abrupt cancellation of mRNA research and other biomedical grants by Trump’s Secretary of Health and Human Services, Robert F. Kennedy Jr. This, Baker argues, has “thrown a massive sledgehammer into the country’s biomedical research system.” The consequences are already being felt, with researchers migrating to Europe, Canada, and elsewhere to escape the political whims that threaten their funding.
The story is much the same in the realm of climate technology. Trump’s policies, Baker contends, have targeted the solar and wind industries for destruction and sought to block the transition to electric vehicles by removing incentives established under the Biden administration. Meanwhile, China is surging ahead: by 2025, more than half of all new cars sold there are electric, and recharging times have plummeted. The result? As the world races toward clean, affordable energy, the US, under Trump, is doubling down on fossil fuels—a move with significant ramifications for energy-intensive industries like artificial intelligence. “China’s leading developers have the advantage of both being far more energy efficient and also having access to cheap and abundant electricity,” Baker writes.
Compounding these challenges, Trump’s administration has launched attacks on university-based research, causing a brain drain as scholars seek more stable environments abroad. American colleges and universities, once magnets for international students, are losing their appeal as Trump’s immigration policies threaten mass deportations and create an atmosphere of uncertainty. In 2024 alone, foreign visitors contributed nearly $220 billion, or 7.3% of export earnings, to the US economy. That figure is likely to decline as the US becomes less welcoming to students and workers from abroad.
Labor force growth is another looming issue. With mass deportations and strict immigration limits, there will be fewer newcomers to offset the retirement of baby boomers, a demographic shift not accounted for in current IMF projections. Meanwhile, America’s traditional allies in Europe and Canada are quietly diversifying away from the US market, wary of Trump’s erratic trade policies and diplomatic spats. “On its current course, the US will both have less economic leverage and virtually zero goodwill by 2030,” Baker warns.
While the US grapples with its own internal and external challenges, another controversy is brewing—this time focused on India’s role in the Russia-Ukraine war. On August 28, The Times of India reported that White House trade adviser Peter Navarro had stirred up a storm by labeling the conflict “Modi’s war,” blaming Indian Prime Minister Narendra Modi for fueling Russia’s war machine through purchases of discounted Russian oil. Navarro didn’t mince words: “Everybody in America loses because of what India is doing. The consumers and businesses and everything lose, and workers lose because India’s high tariffs cost us jobs, and factories, and income and higher wages. And then the taxpayers lose because we got to fund Modi’s war.”
Navarro’s comments came on the heels of the Trump administration imposing steep 50% tariffs on Indian goods, a direct response to India’s continued energy trade with Moscow. His remarks highlight growing frustration in Washington that India, despite being the world’s largest democracy, has declined to join US-led sanctions on Russia. Instead, India and China have emerged as top buyers of Russian oil, taking advantage of steep wartime discounts.
Critics, however, argue that Navarro’s narrative is a gross oversimplification. As The Times of India points out, the war’s roots lie in years of NATO expansion and Western arms supplies to Ukraine. Since the outbreak of hostilities, the US and European allies have poured billions into weapons and aid for Kyiv. The US alone has supplied about $10 billion worth of weapons through NATO funding channels, while American arms exports soared to a record $319 billion in 2024—a 233% increase in shipments to Europe compared with the previous five years, according to SIPRI.
Navarro’s focus on India’s oil imports also conveniently ignores the ongoing US and European purchases of Russian energy. In 2024, European imports of Russian liquefied natural gas jumped by 14%, making Russia Europe’s second-largest LNG supplier. The US, for its part, imported about $1.2 billion worth of Russian enriched uranium in 2023, with a full ban not taking effect until 2028. No such sanctions exist for China, which, along with India, dominates Russian oil imports.
India’s position has been clear. Prime Minister Modi has denounced the violence in Ukraine but maintains that affordable energy is vital for India’s economic growth. External Affairs Minister S. Jaishankar responded to US criticism with characteristic candor: “It’s funny to have people who work for a pro-business American administration accusing others of doing business… If you have a problem buying oil or refined products from India, don’t buy it. Europe buys, America buys, so if you don’t like it, don’t buy it.”
Looking ahead, Indian imports of Russian oil are expected to rise by up to 20% in September 2025, according to Reuters. Modi is also set to visit Japan and China, aiming to strengthen ties amid US tariff tensions and participate in the SCO summit with Chinese President Xi Jinping and Russian President Vladimir Putin.
As the world’s economic and geopolitical balance continues to shift, the US, China, and India find themselves locked in a complex dance of competition and cooperation. The choices made now will shape not only their own futures but also the trajectory of the global order for years to come.