Tariff wars as the Underlying cause of India-Pakistan Conflict

Did US-aligned India deliberately strike Chinese-invested sites in Pakistan?

Given the intensifying tariff wars between Washington and Beijing, India’s strategic partnership with the US, and China’s deep-rooted involvement in Pakistan with heavy investments in infrastructure and energy tells a different story than what mainstream narratives suggest.

Looking back in the escalating events between the two global powers, the timeline of military and diplomatic moves across South Asia reveals a deeper pattern. Remarks and actions by key players in both camps suggest that India-Pakistan tensions unfolded in parallel with recent developments between US and China.

Timeline of Key Events:

• April 2, 2025: Trump called it “Liberation Day”, and said Xi and others “were ripping the US off and they understood it”. Tariffs increased.[1]

• April 4, 2025: Beijing struck back two days later, announced a 34% tariff on all US goods, matching Trump’s tariff rates. Along with this, Chinese Commerce Ministry imposes new measures as export controls on critical REMs (Rare Earth Metals, vital to US tech industries) and blacklisted many US companies as “unreliable entities”.[2]

• April 9, 2025: Both sides enforced 125% tariffs, almost halting all bilateral trade. China vowed to “fight to the end”.[3]

• April 22, 2025: Trump softened his tone on China, said “tariffs will come down substantially”. However, no responses reported from Beijing.[4]
  The same day also marks a terrorist attack in Pahalgam, Jammu and Kashmir, resulted in 26 civilian deaths, predominantly Hindu tourists.[5]

• April 23, 2025: India suspended Indus Waters Treaty.[6]

• April 25, 2025: Trump said “Xi has called” him and that “he doesn’t think it was a sign of weakness on Xi’s behalf”. [7]
  Such a direct statement from POTUS is often taken true, unless of course Beijing disputes it. Shortly after Trump’s statement Beijing officially denied Xi called.[8]

• April 29, 2025: China harshened tone, released a video in English language, in which US is labeled once again as “bully”. It is declared in the video that “bowing to a bully is like drinking poison to quench thirst”, and that “China won’t back down so the voices of the weak will be heard … When the rest of the world stands together in solidarity, the U.S. is just a small stranded boat”. [9]

• May 1, 2025: China revealed, “the US has reached out through multiple channels, hoping to hold discussions on the tariff issue”.[10]
  This means Washington initiated contact over tariffs through backchannels with Beijing, which contradicts Trump’s April 25 statement.

• May 4 2025: India cut water from Baglihar Dam on the Chenab River.[11]

• May 7 2025: India launched Operation Sindoor and started the military conflict with Pakistan.[12]

• 8–9 May 2025: Pakistan retaliated with drone and missile strikes; India responded with further airstrikes.[13]

• 10 May 2025: A US-brokered ceasefire was announced by the US Department of State with an official statement by Secretary of State Marco Rubio.[14]
  The exact same day the US - China trade talks began in Geneva.[15]

• 12 May 2025: The White House released a “Joint Statement on U.S.-China Economic and Trade Meeting in Geneva”, marking an agreement on trade talks was reached.[16]

Chinese infrastructure lies near Kotli, Muzaffarabad and Bahawalpur:

• Kotli (Azad Kashmir) – Chinese Projects Under CPEC:

Kotli region is part of Pakistan-administered Azad Kashmir. It is a center for major Chinese infrastructure investment, especially in energy, which makes it a very strategic location for China near the "Line of Control”.

The most notable project is the Karot Hydropower on the Jhelum River, a 720–796 MW dam developed by China Three Gorges Corporation as part of CPEC

(Source: cpecinfo.comen.wikipedia.org)

This large dam (begun in 2016 and operational by 2022) was the first investment by China’s Silk Road Fund and is a flagship CPEC energy project in Azad.

(Source: Kashmiren.wikipedia.org)

Apart from Karot, the region’s hydropower potential has drawn other Chinese investments: a 640 MW Mahl hydropower scheme is proposed under CPEC. There are also highways built by Chinese engineers linking other major cities to Kotli sites.

• Muzaffarabad (Azad Kashmir) – Chinese Infrastructure Investments:

Muzaffarabad is surrounded by Chinese-funded projects (dams, power stations, communications), making it a strategic center for Chinese interest in Pakistan. A key project is Kohala Hydropower Project (1,100+ MW) being built on the Jhelum River near Muzaffarabad. It is a $2.3–2.4 billion investment led by China Three Gorges Corporation under CPEC.

It is one of the largest foreign investments in Pakistan’s power sector and the largest in the Azad Kashmir region, which drew formal protests from India, who objects to such dams in disputed Kashmir. Hence water use is critical to the Chinese electric grid investments.

(Source: https://indianexpress.com/article/explained/azad-pattan-pok-hydel-project-pakistan-china-6507640/#:~:text=The%20%24%201.5,on%20the%20Jhelum%20near%20Muzaffarabad)

In addition, Muzaffarabad is home to the Neelum–Jhelum Hydropower Plant (969 MW), completed in 2018, which was financed in part by large loans from China’s Exim Bank.

(Source: https://china.aiddata.org/projects/35266/) .

Besides energy, Chinese telecom infrastructure also runs nearby, like the optical fiber link connecting China and Pakistan runs through the broader region. There’s also an ongoing construction of a long highway that connects Gwadar deep sea port with China's Xinjiang region.

(Source:  https://cpecinfo.com/cpec-is-imperative-to-azad-kashmirs-development/)

• Bahawalpur (Punjab) – Chinese Economic Projects:

Chinese involvement in Bahawalpur includes renewable energy infrastructure and nearby logistics routes – integrating this region into Beijing’s broader economic corridor plans.

Notable Chinese investments are especially in energy and transportation. The most prominent one is Quaid-e-Azam Solar Power Park. It is a vast solar farm planned to reach 1,000 MW capacity. The first 100 MW phase was completed by Chinese company called "Xinjiang SunOasis”. An additional 300 MW was installed by another Chinese company called Zonergy under the CPEC. This made Bahawalpur home to one of the largest solar parks in Asia, financed and built by the Chinese.

(Source: https://en.wikipedia.org/wiki/China–Pakistan_Economic_Corridor#:~:text=Quaid,180)

Bahawalpur is in the east of CPEC’s Eastern Alignment: the six-lane Sukkur–Multan Motorway, aka M-5, which was constructed with ~$2.9 billion in Chinese funds and opened in 2019.

(Source: https://en.wikipedia.org/wiki/China–Pakistan_Economic_Corridor#:~:text=The%20392,interchanges%2C%2010%20rest%20facilities%2C%20492)

CPEC also upgrades Pakistan’s main north-south railways passing through Bahawalpur, meaning future Chinese-funded rail improvements will bolster connectivity there.

The Indian strikes in Kotli, Muzaffarabad, and Bahawalpur directly overlap with zones of extensive Chinese infrastructure investments. While India’s stated aim was counterterrorism, the choice of targets near Chinese-funded highways, power plants, and other projects means the action indirectly challenges Chinese strategic interests in Pakistan.

Any damage or prolonged insecurity in those areas could impair CPEC projects or scare off Chinese personnel. Even if no Chinese property was hit, the perception of risk to Belt-and-Road projects may push China to diplomatically intervene, urging de-escalation.

Chinese Projects at Risk from Indian Water Cuts:

India’s suspension of the Indus Waters Treaty and cutting or redirecting flows from rivers like the Jhelum, Chenab, Indus, and Ravi had direct impacts on certain CPEC-related or China-funded projects.

Table: Some Hydropower Dams (CPEC-related or China-funded) and Their Risk Assessment

Jhelum and Chenab are both western rivers under the Indus treaty and are crucial for hydropower projects. India’s diversion or cutting of the water impacts flow volumes and lowers hydropower output from these rivers. This in turn hits the revenues from CPEC, as Chinese state-owned companies have obtained long-term guarantees from Pakistani government to collect higher toll and electricity fees.

Summary:

Considering the above timeline of events, it becomes evident that miscalculation and overlapping strategic aims among the US, China, and India have heightened tensions beyond bilateral borders. Beijing remained defiant even after Trump's softened rhetoric, portraying the US as a global aggressor unwilling to accept multipolar power dynamics.

In the same time frame, India began targeting regions embedded with Chinese infrastructure in Pakistan under the pretext of counterterrorism, raising the stakes for China. This triangle of economic coercion, security retaliation, and regional ambitions points to an emerging dynamic where strikes on Pakistani territory—particularly in zones tied to CPEC—are no longer isolated acts, but strategic moves echoing deeper global rivalry between Washington and Beijing.

References:

1. [1] NDTV – Trump tariff speech: https://www.ndtv.com/world-news/a-little-tough-love-top-quotes-from-donald-trump-tariff-talk-8073946

2. [2] Ministry of Finance of the PRC - China's retaliation: https://gss.mof.gov.cn/gzdt/zhengcefabu/202504/t20250404_3961451.htm

3. [3] Reuters – China vows to fight: https://www.reuters.com/world/china-says-it-will-never-accept-us-blackmail-escalated-tariff-threats-2025-04-08/

4. [4] CNN - Trump says tariffs will come down: https://edition.cnn.com/2025/04/22/business/trump-china-trade-war-reduction-hnk-intl/index.html

5. [5] BBC – Pahalgam attack: https://www.bbc.com/news/articles/cy9vyzzyjzlo

6. [6] NPR - India suspends water treaty: https://www.npr.org/2025/04/23/g-s1-62285/india-kashmir-attack-indus-water-treaty-pakistan

7. [7] Reuters – Trump says Xi called: https://www.reuters.com/world/trump-says-xi-called-him-lays-out-trade-other-deal-plans-time-interview-2025-04-25/

8. [8] CNN – China denies Xi call: https://edition.cnn.com/2025/04/28/china/china-rejects-trump-claim-xi-call-intl-hnk

9. [9] WeChat video - China says it won’t back down: https://mp.weixin.qq.com/s/3vHRUSJoZKGM_T7BVchw4g

10. [10] Reuters – U.S. reached out to China: https://www.reuters.com/world/us-has-reached-out-china-talk-tariffs-state-media-says-2025-05-01/

11. [11] Hindustan Times – India cut water: https://www.hindustantimes.com/india-news/india-cuts-off-water-flow-to-pakistan-from-dam-on-river-chenab-101746383594636.html

12. [12] Al Jazeera – India strikes Pakistan: https://www.aljazeera.com/news/2025/5/6/india-launches-attacks-on-several-sites-in-pakistan

13. [13] France24 – Pakistan counterattacks: https://www.france24.com/en/live-news/20250509-pakistan-warns-won-t-de-escalate-as-conflict-with-india-spirals

14. [14] US State Department – Ceasefire announcement: https://www.state.gov/releases/office-of-the-spokesperson/2025/05/announcing-a-u-s-brokered-ceasefire-between-india-and-pakistan

15. [15] NPR – U.S.-China Geneva talks: https://www.npr.org/2025/05/10/nx-s1-5394399/u-s-and-china-begin-talks-amid-tensions-over-trumps-tariff-war

16. [16] White House Statement: https://www.whitehouse.gov/briefings-statements/2025/05/joint-statement-on-u-s-china-economic-and-trade-meeting-in-geneva

image: Tiger Analysis

© copyright reserved