Trump-Xi bonhomie, reference to G-2 may impact India, Indo-Pacific and Quad

The summit between U.S. President Donald Trump and Chinese President Xi Jinping in Busan, South Korea ended with several outcomes for bilateral ties between the two countries, but also sent ripple effects to India. As a result of the talks, the U.S. has reduced tariffs on China to 47%, making India (and Brazil) at 50%, the highest tariffed country.  More than the specific outcomes, including a one-year truce on trade tariffs and export restrictions on rare earth minerals, however, experts said the characterisation by both leaders of the U.S.-China “G-2” or grouping of the two biggest global powers, may have the bigger impact, especially for the region. 

Moments before the summit, Mr. Trump posted that the “G-2 will be convening shortly!”. At the meeting with Mr. Xi, Mr. Trump began by saying, “I think we are going to have a fantastic relationship for a long period of time.” Mr. Xi said that as the “two leading economies of the world” U.S. and China must improve ties.

“China and the United States can jointly shoulder our responsibility as major countries, and work together to accomplish more great and concrete things for the good of our two countries and the whole world,” he added, according to a Chinese Foreign Ministry statement.

When asked about the summit, Ministry of External Affairs spokesperson Randhir Jaiswal was non-committal.

“As far as the question of the latest [Trump-Xi] talks and relaxations that have happened between U.S. and China, as to how it is going to play into our domain, I will come back to you. We have yet to look at it. I am not aware of the technicalities,” he told reporters on Thursday. To a specific question about the G-2 reference, the spokesperson retorted, “if your question is about U.S.–China, ask the U.S. or ask China.” 

The G-2 or the idea of creating an exclusive U.S.-China club to work on global issues was floated as a concept about 15 years ago around the summit between U.S. President Barack Obama and Chinese President Hu Jintao in 2009, when trade, climate change and nuclear proliferations were pressing concerns for the U.S. However, Mr. Obama never used the term himself, and subsequently as U.S.-China tensions increased, the administration dropped the idea entirely by 2011.

“The Obama administration conceptualised the “pivot to Asia” as a way of managing the challenge from China, and the Trump 1.0 continued that with the Indo-Pacific strategy, including reviving the Quad,” said former Indian Ambassador to Washington Meera Shankar.

As a result, the use of the term “G-2” itself could indicate more troubling times are ahead for India, that has yet to finalise a trade deal to reduce retaliatory tariffs of 25% , and not been able to persuade the U.S.  to roll back an additional 25% for buying Russian oil in trade negotiations so far. 

Another issue is the impact of any entente between the U.S. and China on the Quad and other Indo-Pacific initiatives. 

“India has always been more for a multipolar world order rather than for a shared hegemony between the top two powers, or G-2. One has to wonder if this will lead to carving up the world into “spheres of influence”, as that will not only challenge India’s stature but also the viability of the Quad.

Speaking to reporters on board his flight returning to the U.S., Mr. Trump said he intended to visit China in April 2026, and host Mr. Xi in the U.S. later in the year. While no date has been sent for Mr. Trump’s travel to India to attend the Australia-India-Japan-U.S. Quad Summit to be hosted by Prime Minister Narendra Modi, reports suggested that this was unlikely to take place in 2025. As a result, if Mr. Trump returns to Asia next year, the question won’t just be whether he will be part of the Quad summit in India, but whether his new “G-2” plans with China will dilute the group’s agenda to secure a free and open Indo-Pacific.