With testy language now having given way to actual measures, there is uncertainty as to how the US-India trade relationship will develop from here.
Much emphasis is being put on a meeting due to take place in New Delhi toward the end of the month between US Secretary of State Mike Pompeo and his Indian counterpart, Subrahmanyam Jaishankar, ahead of the G20 summit in Japan which takes place from June 28-29.
According to the US state department, US-India bilateral trade reached $142 billion (€126 billion) in 2018, amounting to a massive sevenfold increase since 2001. Just last month, the Indo-American Chamber of Commerce said that figure could jump to $500 billion annually within five years.
With trade one of the primary calling cards of Donald Trump's presidency so far and his election campaign before that, it should perhaps not be surprising that it is now a bone of contention in the US-India relationship. Yet many observers have been surprised by the speed of the gear shift.
Within a year, the countries were increasing tariffs on each other — the US refused to exempt India from the wide-ranging tariffs it levied on steel and aluminum imports, while India targeted US food products such as almonds and shrimp. Trump had also started to loudly question the benefits Indian exporters were receiving through the GSP.
Flipping out over Flipkart
Now Indian exporters of around $6 billion worth of goods ranging from chemical products to diamonds, textiles to crustaceans face reduced access in their biggest foreign market while US farmers will face tariffs of around 100% on several food products for which India is one of the main customers.
Yet how damaging it will ultimately be to US-India trade volumes remains to be seen. The Indian tariffs, in effect since Sunday morning, cover around $1.4 billion of goods, which is not a monumental amount in the overall US-India trading relationship.
How other aspects of the countries' economic relationship play out may prove just as significant. Washington was irked earlier this year when India announced a regulatory clampdown on US e-commerce giants like Amazon and Flipkart (Indian-founded but now owned by Walmart).
Huawei is another potential sore point. The Chinese tech giant has plans for expansion in India and hopes to play a role in building the country's 5G network, something Washington is unlikely to take too kindly.
For its part, India is less than impressed by US threats to impose sanctions if the country buys oil from Iran and if it proceeds with plans to purchase Russian anti-aircraft missiles.
The meeting slated for later this month may yet produce a "deal" of some kind, which could go some way to cooling tensions.
Pompeo recently said the US was open to restoring India's preferential trade treatment, offering a chink of light that a resolution could be reached. "We'll probably discuss the recent decision on the GSP program," he said.
However he added that he hoped "India will drop their trade barriers and trust in the competitiveness of their own companies, their own businesses, their own people and private sector companies," a nod to the kind of gestures the US will be seeking in return.