India Misreads Trump Yet Again

For a country whose foreign policy is cunningly super-strategic (whether the strategy fails is another matter entirely), it is somewhat bemusing to see India consistently fail to understand Donald Trump’s own global strategy. This is all the more bemusing because as a matter of fact, Trump’s foreign policy strategy is far more straightforward than India’s attempts to play all sides against each other for some unique and largely unattainable benefit. The proximate cause of India’s current bewilderment is Donald Trump’s notice to withdraw India from the Generalized System of Preferences (GSP) programme. GSP provides certain developing nations with blanket exemptions to standard WTO tariffs which in effect gives GSP countries a de facto “most favoured status”, over and above baseline WTO rules.

Trump’s rationale for withdrawing GSP tariff exemptions from India is ‘classic Trump’, insofar as the American President feels that India has too many restrictions (typically in the form of non-tariff barriers) to the importing of US goods into the Indian market. Speaking of his decision, Trump said:

“I am providing notice of my intent to terminate the designation of India as a beneficiary developing country under the Generalized System of Preferences (GSP) program. I am taking this step because, after intensive engagement between the United States and the Government of India, I have determined that India has not assured the United States that it will provide equitable and reasonable access to the markets of India”.

The prelude to Trump’s decision has been a long and well documented one. Over a year ago, Trump openly complained of high Indian trade barriers to American motorbikes, in spite of the fact that under GSP rules, Indian made motorbikes were sold at a comparatively inexpensive price in America. Trump later called India a “tariff king” and warned that New Delhi must relax barriers to US goods or else face the consequences. Finally, last weekend during the longest speech of his presidency, Donald Trump slammed India’s trade practices to the cheers of his nationalistic supporters.

And thus, one sees that when it comes to trade and security partnerships – Trump has clearly “out Modied” Narendra Modi.

Modi’s government is one that preaches economic modernisation, but in reality resorts to age old nationalistic trickery involving handouts and subsidies. This is particularly true during an election season. Likewise, Modi likes to invoke the threat of terrorism and other alleged (though largely fictitious) challenges to India’s safety, when in reality, military threats are little more than a strategic tool used by Modi to bolster his power and popularity. This was very much the case in respect of Modi’s “surgical tree strike” which was aimed at galvanising the jingoist vote. It is similarly true in respect of India courting an American strategic security partnership built on a shared paranoia regarding China. Finally, Modi is quick to criticise China’s economic model as being too closed, whilst in reality, China is opening itself up to more imports and foreign capital and services than at anytime in contemporary history. By contrast, India continues to hide behind both tariffs and the Trojan Horse of non-tariff barriers to trade.

If Modi’s policies and characteristics sound familiar to an American audience, it is because Modi’s position is a lot like that of Donald Trump. Both men aren’t ashamed of wanting the world to open its markets to their national goods, whilst both men are all too happy to prevent foreign imports (particularly Chinese ones) from entering their respective nations. Likewise, both men tend to view everything from foreign trade deals to security agreements as a means of courting domestic popularity. Whether it is Trump unleashing the neocons in his White House on Venezuela or Modi unleashing his vintage military on its peaceful neighbour Pakistan – both men have a short fuse when it comes to literally getting out the big guns in a run-up to an election season.

Beyond this, whilst both men react very negatively to personal disloyalty, neither man cares much about geo-strategic loyalty. This is why Trump is happy to bring ever more nations into America’s security orbit without offering any trade concessions in order to sweeten the deal. India has self-evidently been surprised by this reality regarding Trump’s America, in spite of the fact that India is very similar when it comes to seeking zero-sum benefits from its geo-strategic partners, at the expense of establishing the trust required in order to consecrate sustainable win-win partnerships.

This is why it was quite extraordinary that India threw a public strop when last year, Trump refused to exempt India from his global steel and aluminium tariffs. This was all the more extraordinary as India isn’t even a major exporter of steel to the American market.  Ironically, it was Trump’s failure to exempt his Indian security partner from global metal tariffs that led to something of an early-stage thaw in China-India relations during the second half of 2018. Again, like Trump, Modi is quick to run to “the other” when he finds that he is not getting what he wants from his first option. This is why Modi ran to China in a spirit of reconciliation in 2018 and it is likewise why Trump has a tendency to make peace with those he had formerly threatened to destroy – the DPRK for example.

And yet, in spite of the similarities between the two leaders, the Modi government has been blindsided by Trump’s decision to do the same thing that Modi would surely do were he the President of the United States. Ultimately, both men are men of double standards – one standard for one’s own nation and a very different and much harsher standard for the rest of the world. In this sense, Modi failed to recognise in Trump, his own infamous characteristics.

Of course, Trump has no interest in harming Modi’s election chances by conducting a proverbial “surgical tariff strike” on India – but nor does he seek to go out of his way to bolster the electoral fortunes of Modi’s BJP. This is true for the simple reason that Trump is doing exactly what Modi is doing – worrying about his forthcoming re-election bid and seemingly nothing else.

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