Donald Trump provokes India on trade: New Delhi should ignore him, engage in quiet diplomacy with Washington

By now the world has figured out that the only predictable thing about Donald Trump is his unpredictability. Still, it doesn’t quite prepare us for the bizarre twists and turns patented by the Oval Office occupant. America’s friends and foes alike are frequently befuddled by Trump’s bewildering balderdash, allowing even for the liberal dose of rhetoric that characterises his statements.

File photo of US president Donald Trump. AP

File photo of US president Donald Trump. AP

It was only last week, on 25 September, that the US president showered praise on India while addressing the United Nations General Assembly (UNGA). Trump’s glowing comments, that as a “free society” a billion-strong India successfully managed to pull millions out of poverty into the middle class, received wide media attention.

Barely a week later, India came under Trump fire. New Delhi earned the unfortunate moniker of ‘tariff king’ and the US president declared during a news conference on Monday that India is “desperate” to cut a trade deal to ward off his threats of duty hikes. He also appeared to quote Modi in claiming that nobody ever spoke to “these people” (Indians) on trade issues before and referred to a conversation that US trade representative Robert Lighthizer had with Indian officials to quip that Indians are keen to “please him”.

India, which is the tariff king, they called us and they said, 'we want to start negotiations immediately’,” said Trump, adding “When Bob Lighthizer said, ‘What happened? He would never do this.’ They said, ‘No, we want to keep your president happy.’ Isn’t that nice? Isn’t that nice? It’s true. They have to keep us happy, because they understand that we’re wise to what’s been happening.” Trump also raked up the Harley Davidson issue (he is keener on this topic than even the motorcycle manufacturers themselves) and indicated that India wants to reduce the tariffs).

The rasping statements lead to an unsavoury interpretation: that Indians were ripping off the US until recently and are now changing their tactic only because they have been found out by a super smart president. Trump has been repeating these statements at regular intervals.    It trivialises an issue that has been the subject of long-standing discussions between the USTR and Indian commerce channels and unnecessarily berates a strategic partner.

Trump’s latest comments on India, made during a press conference where he announced the formulation of a revised trade deal with Canada and Mexico called US-Mexico-Canada Agreement (USMCA) to replace the North American Free Trade Agreement (NAFTA), come in the context of US trade official Mark Linscott’s recent visit to New Delhi. The US assistant trade representative reportedly had detailed discussions with senior Indian officials on bilateral trade and a possible deal. If both nations are edging towards that highly unlikely trade agreement, Trump’s haranguing may add to the wrinkles instead of smoothening them.

His comments also undercut the trajectory of bilateral ties. The US-India strategic partnership is riding high on the wings of shared values and mutual interests. The relationship has become deep, wide and comprehensive: with implications in maritime, strategic, geopolitical and economic spheres.

Strong people-to-people ties have connected both nations even during diplomatic dissonance. Now, defence trade is up, military cooperation has intensified with India and the US signing a landmark foundational agreement during the recently held 2+2 talks. COMCASA is expected to allow joint operability and secure communications between respective militaries, make war games more elaborate and pave way for India’s buying and America’s selling of more advanced equipment.

There has been renewed focus on co-production and co-development of projects through Defence Technology and Trade Initiative (DTTI) and bilateral cooperation on counterterrorism has been expanded. And these are just some of the areas that undergird the relationship.

India has become central to US efforts in maintaining the equilibrium in Asia’s balance of power. It is the lynchpin of US Indo-Pacific Policy and occupies an important space in Trump administration’s National Security Strategy.

“More significant”, as foreign policy analyst C Raja Mohan pointed out in The Indian Express “is the growing convergence of perspectives on regional and international affairs. Few other powers have been as positive as the US in addressing either India’s concerns about terrorism in the region or as supportive of its aspirations for a larger international role. Further, India has no territorial disputes with the US. Nor have Delhi’s armies ever had to confront Washington’s.”

While all of this makes for a stable, mature and fulfilling partnership, there is Trump to drive a wedge between order and method and upend the post-Cold War consensus that has created global rules-based order allowing developing nations such as India to lift millions out of poverty, as he pointed out during his UNGA address.

If this sounds dichotomous, Trump’s speech contained valuable clues behind that dichotomy. He apparently doesn’t want any country to “take advantage of the US” ever again and wants to tear down the elements of the very global order that the US had put in place, maintained and championed since the second World War.

Trump’s extraordinary speech—where he rejected multilateralism, global treaties and institutions to “protect US sovereignty”—gave us a good look at his worldview that is defined by an inexplicable persecution complex and paranoia. If anti-elitism marked Trump’s route to political power, as president he has identified the global trading order as the chief enabler of that rootless elitism on which he blames all of America’s ills. Trump’s anti-trade views aren’t new.

As Nelson W. Cunningham, member of the board of the US-India Strategic Partnership Forum, wrote in Livemint, “In 1987, he (Trump) spent almost $100,000 to run full-page ads in The New York Times, The Washington Post and The Boston Globe attacking America’s allies and the way they took advantage of the US, including “huge deficits”. These ideas would fit comfortably into a Trump speech today.”

It is Trump’s belief that the disadvantageous global trading order (championed and institutionalised by the US) should be stripped in favour of a “fairer system” that is ‘deal-based’, not ‘rule-based’ and he backs himself to cut deals better than anyone else in the planet. This may explain his derision towards the present system which, believes Trump, leads to nearly every trading partner cheating the US and filling their coffers at America’s expense. India is a member of this unfortunate bloc and hence the recipient of his vituperative rhetoric.

What Trump ignores is that the system he is so keen to dismantle has not only benefitted developing nations and enabled them to expand their economies, it has also brought benefits for the US, expanded its sphere of influence and reinforced its superpower status. On the maintenance of this rules-based order and stability lie the conditions of US exceptionalism. It seems Trump is driven by a reactionary impulse that wants to strike at the roots of US hegemony.

As Stewart M Patrick wrote in Council on Foreign Relations, “Trump’s narrow-minded, transactional approach to diplomacy is also ill-founded and counterproductive. The US global alliance system, which has been the handmaiden of globalisation, has rewarded the United States handsomely, underpinning its global influence, ensuring international stability, and guaranteeing that America can handle any adversary.”

Practically every other nation has had to dig deep to manage the aftershocks of Trumpian disruptions. But New Delhi’s situation is more complicated. It is in India’s interest to maintain a close strategic partnership with the US, nurture the relationship with its single-largest trading partner, champion the cause of globalisation and ensure the stability of a multilateral order that allows its economy to grow at a fast clip. At the same time, India prefers an incremental opening up of its economy and is loath to remove all shutters of protectionism.

For all the geopolitical and strategic convergence, it is on trade that both nations lack concord: a situation that has been made complex due to Trump’s obsession with trade deficits. India may take comfort from the fact that Trump’s rhetoric is often a ploy to force the party to sit across the table.

With mid-term elections coming up in the US, New Delhi may expect more such interventions. It has little option but to manage the risks and fallout on trade and work towards strengthening the other planks of the relationship. Trade remains a major irritant and differences need to be sorted sooner than later to prevent a spillover into other domains.

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Updated Date: Oct 02, 2018 22:28 PM

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