By Anjan Roy
India will for sure face some limited economic impact as the US President Donald Trump’s 25 per cent tariff on Indian exports to USA, starts to be effective from August 1, Friday.. However, it could still be manageable eventually with a determined effort to further diversify India’s exports base.
Where it will hurt is the shift in overall US policy. There are no dearth of anti-India players in the USA who fancy using Pakistan to needle India. Already, these caucuses are active. To take revenge against India standing out against US bullying on trade, USA has already started a well orchestrated hype.
USA has announced developing a “huge oil reserve in Pakistan” and eventually sell that oil back to India. While it is not very clear how Pakistan suddenly discovered huge oil reserves in the country, the shift in rhetoric about Pakistan is significant.
This implies a change in the geo-politics. China is known to overtly and covertly support Pakistan in its die hard adversarial activities against India. This might be joined with United States now which could create real problems for India on a wider front.
Iran, a veteran in the diplomatic game, has already sensed how American stance reneging India could mean an altogether changed paradigm. The Iranian embassy in India has, on its own, issued a statement citing American threats to India as a new kind of “economic imperialism”.
The statement indicates a new range of alignment in which Iran talks of the emergence of a broader global compact to counter American neo Imperialism. Iran implicitly urges India to lead this new global south compact against America in its current format under its unpredictable president.
These realignments are basically stemming from the frustration of the US president about his global efforts to project himself as the final arbiter.. He has failed with his diplomacy with Vladimir Putin in resolving the Ukraine crisis which he had naively believed could be achieved with his personal charisma with the Russian leader.
White House and American diplomats have admitted Putin has “played” Trump all through his telephone conversations with Donald Trump.
He has equally failed to make a breakthrough with the Israeli leader, Benjamin Netanyahu, in bringing about some peace in Gaza and stop the continuing genocide.. Netanyahu has defied him time and again in carrying out punishing air raids in Gaza and Syria.
Trump has been exposed as much a failure in foreign policy as his predecessor, Joe Biden, whom he had despised bitterly. Now the stigma is sticking on to him.
Against this background of complete melt down of his claims as the deal-maker, Trump had pushed his trade agenda to rehabilitate his reputation as a deal-maker. Trump has used “brutal force” to bring about trade deals with the European Union, Japan and Britain. He had thought of gaining an equally one-sided trade deal with India. However, India had proved to be a harder nut to crack.
The vehemence with which Trump is seeking to punish India underscores his frustration and impatience. He has repeatedly claimed his “friendship” with prime minister, Narendra Modi. However, he has also admitted his disappointment with India and Modi as a tough negotiator.
Not only has he slapped higher tariffs on India, when trade talks were still unfinished, he is threatening additional tariffs, not yet announced, for Indian purchase of Russian crude oil. There is that of other tariffs on India, including one for being a member of the BRICS. Trump blames BRICS as an anti-American and anti-dollar combination.
Significantly, so far Donald Trump has not announced any anti-BRICS tariff for China, or for buying Russian crude oil, although the country remains the other major buyer of Russia crude.
This puts India in a double cross. While America and India were supposed to co-operate and collaborate, they land up in opposite sides.
Meanwhile, China is the real gainer on all sides. China is already working out a deal with United States and the talks are making progress in Stockholm, according to reports appearing in the international press. If the Chinese deal is done, USA can turn its attention to others.
The reason China could pull such concessions from the USA and Donald Trump is its ability to threaten America and Donald Trump —both in terms of its military strength as well as economically. In fact, the Chinese had sensed Trump vulnerability already at an early stage when the US-China tariff threats were in the air.
The Chinese had called Trump in a new name — Trump Always Chickens Out or TACO— on their own social media platforms. The TACO acronym has stuck to Donald Trump ever since.
As Trump had threatened China earlier with astronomically high tariffs and other measures like cancelling visas to Chinese students in American universities, China ordered suspension of all shipments of rare earth mineral to America.
China enjoys virtual monopoly in supply of rare earth minerals —which have since recently emerged as the ultimate natural resource used for production of automobiles to whole range of defence articles. The threat worked and in the London talks, the US agreed to some Chinese demands and China allowed supply of rare earth materials to US. The successful conclusion of Stockholm US-China trade talks may lead to Trump’s visit to China at a convenient time.
Never mind that China achieved this transnational monopoly at a huge domestic cost. The entire region where rare earth minerals were mined had become so toxic that local population is suffering heavily from the pollution and toxicity in the atmosphere. Children are being born with deformities and disabilities. But this rare resources helped China in getting good bargain in the trade talks. India could not exercise any such bargain with Trump. (IPA Service)
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