On 2 April, US President Donald Trump threw a guntlet with a global order created by the world and the 1945 America with a Guntalet and a significant country-specific tariff. The tariff rates were higher than that of Trump’s leading trading supporters in the US were also higher. Markets reacted negatively worldwide, falling 10% in the US. The US Federal Reserve is now expected to put back on any interest rate cut, which is expected to have inflation. Analytical comments, potentially, are comparing disruption of great depression of the 1930s.
While global anger and anxiety, most countries have so far avoided retaliation, although they have emphasized their right to do so. However, China is one of the few people who have already matched a mutual tariff of 34% on imports from the US. Only, it exports far more than imports. The purpose of Beijing is to apply political pain on Trump by cutting supply from its supporters, especially the US agricultural belt.
A divided world
Voices are divided into the European Union, the European Commission has clarified the need for vengeance, although many major countries, including Germany and France, are currently undergoing their own political instability and transition. Thus he has preferred a cautious approach and interaction to reduce rates rather than in competitive growth. Canada and Mexico, already a target of specific tariffs on steel and aluminum imports, 10% tariff was spared on 2 April on 2 April. There is no doubt, these were due to the enforcement difficulties that will be generated in the first term of Trump in view of the deep supply chain integration under the US-Maxico-Canada Agreement (USMCA).
The Prime Minister of Singapore, meanwhile, in a address of his country, declared the current global order dead and warned the need to prepare for adjustment. He said that small countries would be abandoned with very little bargaining power, if in the next stage, business agreements are bilaterally interacted rather than multilately agreed rules and norms.
Republican control
There are many lessons that will need to attract other countries as the globalization of trade and production, informed about the imbalance flowing from misuse of the provisions of the WTO (World Trade Organization) of China, which is focused as 32% of global manufacturing in the country through subsidy and forced technology transfer. We should expect continuous policy unpredictory from the US as the impact of its measures for domestic political and economic benefits is assessed. There are partitions between parties and businesses about the correct approach and deep polarization in American society. Already, protests against government policies have begun.
However, the mainstay of Trump is built with him, due to which Republicans have not yet come under any effective or large -scale opposition. In addition, with the Republican under the control of both the Houses of the US Congress, the system of check and balance envisaged in the US Constitution is not currently fully fully. The courts and their decisions are being politically challenged through the dangers of non-cooperation or impeachment. Individuals with radical right-wing ideas are seen as an external influence on personnel and policy decisions, with such a figure, Laura Lumor, is seen as responsible for the recent firing of several National Security Council officials, as well as Timothy Huga as well as Timothy Huga, Director General of the US National Security Agency.
February meeting
India, there is no doubt in this, we will have to weigh your response carefully. The US is its largest trading partner in $ 200 billion, with a $ 45 billion surplus in favor of India. In the past, China, the Republic of Korea, increased due to adequate access to the American market in many countries, including many in the Republic of Korea, Japan and Europe. Given the current political environment in the US around the distribution of trade and production, the same opportunity will not be available for some time. It would be important to work on a bilateral, multi-regional free trade agreement to go around the new American tariffs and gain market access to the market. 54% of overall tariffs on China and 46% on Vietnam suggest possibilities for competitive advantage, 26% tariffs against the face of Indian products. Following the Indian Prime Minister’s meeting with Trump at Washington DC on 13 February, the two countries announced an agreement to work towards a trade agreement and to complete their first installment with this year’s collapse. Negotiations with the Indian Commerce Minister’s visit to the US have begun, and later, by an assistant American trade representative for India.
According to reports, after a wide understanding on the approach to be taken, the two sides will now come down for detailed, region-specific discussions. If a first installment actually ends successfully, we can expect a trump trip in India later this year for a quad summit. In that case, there will be pressure on both systems to generate more positive opportunities for cooperation.
Room to Vigling
In January 2023, in the Biden era, the US and India started a major new initiative on Critical and Emerging Technologies (ICET), which was demanding deepening in AI, quantum technology, cyberspace, 6G, biotechnology, semiconductors, defense and space. Its purpose was to work on co-development of technologies, causing production-sharing and later, regional trade facilities. The semiconductor Space saw some progress with the announcement of new American investments in India, while in defense, things proceeded with the launch of Indus-X (India-US Defense Acceleration Ecosystem). In the space sector, a decision was taken to start a joint mission for the international space station. The current Trump administration, walking away from the initiative of several biden-era, maintained the essence of ICET, although with a rebranded name: ‘Trust’, which stands to change the relationship using strategic technologies. This means that there is the ability to create new opportunities to continue technology participation for mutual benefit and promote field-centric trade.
Despite tremendous disruption due to the latest American tariffs and trade policies, the US would like to maintain its position as a major global economic and technology player. While it has taken measures against countries across the board, including major colleagues and partners such as Japan and various European countries, it has identified China as its main economic, technical and military challenge globally, which is with the intention and ability to change the US in the international system. American policy makers and businesses admitted that they need a partnership with their technical-human capital to take 1.4 billion people in India as well as China. Currently, despite all uncertainty and upheaval, opportunity for India will be a lie.
(The author is a former Indian ambassador for America, France and Israel)
Disclaimer: These are the personal opinions of the author