CWA # 2311
The World This Quarter
The United States (Jul-Sep 2026):
Trade deal with India, Meetings on Ukraine, Missing Iran Ceasefire and Trump-Xi summit
The World This Week #376, Vol 8, No. 38, 25 October 2026
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Shreya Upadhyay
25 October 2026
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This November, as the US gets ready to vote for in the midterm elections, the battle for Congress is tightening on both the sides. The results will have significant impact on how the next two years are going to be, not only domestically but also with an impact on foreign policy. Notably, Trump’s approval since taking over presidency has fallen from just over 50 per cent to 37 per cent now. If the Democrats win, their policy agenda is to repeal the tariffs, restore healthcare subsidies, push back on the Iran war, and investigate the administration. It has been this deadline that governed the last quarter for the Trump administration.
1. The Trade deal moved finally!
A first tranche of the India-US Bilateral Trade Agreement was announced via a Modi-Trump phone call, cutting US tariffs on Indian goods from 50 percent to 18 percent and removing the punitive surcharge Washington had imposed over India’s Russian oil purchases. At the time of writing it was undergoing legal drafting with broad framework finalised. Finance Minister Sitharaman, speaking at the IMF-World Bank meetings in Bangkok also impressed upon early conclusion of the full BTA. This is a real outcome after a two years of on-and-off negotiations.
It is a real outcome after two years of on-and-off negotiations. And Indian exporters in textiles, pharmaceuticals, and engineering goods will feel the difference. However, the terms matter. Indian side has stated that India won’t operationalise until it has secured a competitive advantage over peer economies. The US Secretary of State Rubio flew to Mumbai and Jamnagar on October 17, with energy cooperation as the stated agenda and the Sanctioning Russia and Iran Act as the subtext. The pressure points therefore are still there, even as the trade door is open. For Indian professionals, EB-1 and EB-2 visa retrogression however continued through the quarter, with no green card approvals expected before October 2026.
2. Russia-Ukraine developments
This quarter saw US direct engagement with Russian leadership in months with talks taking place in Miami, Abu Dhabi and United States Special Envoy for Peace Jared Kushner flying to Moscow in early September. Currently, Russia holds roughly 20 percent of Ukrainian territory and is mobilising 300,000 troops after its Duma elections. Formal talks between Russia and Ukraine have not resumed since February.
Notably, on October 9, Trump announced a diesel deal with Putin, a US Treasury sanctions licence allowing up to 4.8 million tonnes of Russian diesel into global markets between October and December. This was framed as a move to “lower prices for Americans” ahead of the midterms. The announcement came amidst the discussion of peace proposal among American and Ukrainian officials. Two days later, Trump called for Zelenskyy to be replaced, blaming Ukraine’s refinery strikes for high fuel costs. Talks of “energy ceasefire” is ongoing. The diesel deal is instrumental in signalling that for the US, fuel prices are a campaign variable to be taken into account.
3. The Iran ceasefire that did not happen
The Islamabad Memorandum lasted less than three weeks with both the sides calling out its suspension. No nuclear deal and no renewed ceasefire could be reached. In September, Iran put forward a new roadmap to reopen Hormuz within seven days, in exchange for the US lifting its naval blockade, unfreezing $12 billion in Iranian assets, and ending hostilities in Lebanon. Trump rejected it the same day and called Hormuz strait - “Trump Strait”. Iran since then has changed tactics. Fifteen attacks have been recorded on ships between October 6 and 14. Only 2.9 million barrels of oil passed through Hormuz on October 11, the lowest level this month, against a pre-war average of 17.1 million barrels a day. The issues blocking the deal remain unchanged- who controls Hormuz, the naval blockade, frozen Iranian assets, and Iran’s nuclear programme. Iran will not discuss nukes until blockade is lifted and the US won’t lift the blockade without nuclear assurances.
4. Trump's meeting with President Xi
Xi’s Washington summit just after attending the BRICS summit in New Delhi was the first state visit in eleven years. The two parties agreed on a framework for handling AI incidents, more favourable tariff treatment on non-sensitive goods, and to cooperate on the 2026 APEC and G20 hosting cycle. Taiwan, rare earths and the Iran war were discussed and not resolved. All in all it was high on spectacle and low on substance. But the structure is important. This was the second Trump-Xi meeting of 2026, and a third is going to take place in November. This shows a larger bilateral channel in place, and a duopoly in making, even as multilateral order seems to be fraying.
To Conclude:
Last quarter’s defining feature has been the November 3 deadline. From the trade deal moving in seemingly right direction, Russia-Ukraine war to Iran ceasefire talks, all had a domestic return address. And through all of it, a US-China bilateral management channel is being institutionalised with AI framework and trade talks being negotiated bilaterally. For India, this is a wake up call. While BRICS hosting was a diplomatic win and a formation of third pole, the value of being a swing partner remains only when US-China remain competitive. When rivalry is managed, the room for New Delhi to play becomes smaller. This is the structural limit of strategic autonomy in a world being shaped by duopoly.
About the author
Dr Shreya Upadhyay is Assistant Professor at Christ (deemed to be) University, Bengaluru, and Fellow, Kalinga Institute of Indo-Pacific Studies.