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by Rod D. Martin
February 4, 2026
On Monday, the United States and India reached a long-awaited trade agreement and will begin lowering tariffs on each other’s goods immediately. The United States will cut its reciprocal tariff rate from 25 percent to 18 percent, while — wait for it — India has agreed to move forward to reduce [its] tariffs and non-tariff barriers against the United States to ZERO.
Not only that, India has also committed to buying a far higher quantity of American goods including $500 billion of U.S. energy, technology, farm produce, and even coal.
I know none of this will surprise regular readers of The Rod Martin Report. But it's certainly shocking to the dingdongs in the Beltway who told you this was impossible. Particularly after Trump hit the Indians with a 50% tariff on their imports of sanctioned Russian oil, the Enemedia breathlessly told us that Narendra Modi was Xi Jinping's new best friend, and together with Vladimir Putin, would shortly gang up on America, overpower us militarily, and drive us into recession or worse.
Bunk.
Donald Trump understands what none of them has: that America has just 4% of the global population but more than 26% of the global economy. We're the biggest consumer market in the world, and all of our competitors have economies driven, to one degree or another, by exports to the U.S. China built its entire economy on exports -- its domestic consumption is a fraction of the West's -- and without America, it goes under. India isn't in that position yet...but as it ramps up its own exports, it must inevitably get there.
That gives America leverage, leverage no prior President since Reagan has had the guts or the desire to use. Trump gets it: he learned it from Reagan.
That begins with a rebalancing of trade. For too long, our so-called allies have shut us out of whole sectors of their economies: Germany charged us 4X our tariff on autos, India effectively blocked Harley-Davidson, Canada — Canada! — shut out U.S. dairy farmers, while making fortunes selling to us.
Those days are over. Trump's tariffs are a beginning not an end. They're a reset: they open the door for U.S. exporters, they incentivize foreign manufacturing in the United States, and over time, as our trading partners realize they can no longer freeload or cheat us, and truly appreciate the benefit of lowering trade barriers, those tariffs will come down — as Trump said at the 2018 G7 — to zero.
That's the endgame. It won't happen this year, or probably this term. But it's a global reset that will make everyone richer, all over the world. Trump's term is "commerce not chaos": work with us, we'll make you rich. Work against us, we'll bring down the hammer.
If governments are instituted to serve those who elected them and pay taxes to them, that is a completely appropriate and necessary application of U.S. power. The India deal is the beginning of a strategic partnership that will help define the rest of the century.
This is a good day.
