The trade brawl
India and the United States seem to have hit an unending argument over tariffs. The brinkmanship, however, is on the part of White House as President Trump has honed an attitude of pushing his allies and adversaries to the wall as he goes on to negotiate new trade concessions.
Trump's new-found irksomeness with Russia, after a brief episode of cordiality, is at the crux of policymaking as the White House incumbent wants to penalise every state that indulges in profitable business with Moscow. Trump's decision to slap 50% tariffs on imports from Delhi, doubled from 25%, as a penalty for oil imports from Russia is likely to dip their bilateralism to lowest ebbs.
India is also being blamed for fuelling the war in Ukraine, and for outsourcing Russian oil to destinations in Europe. In a rejoinder, Delhi says that its purchases from Russia have helped stabilise oil prices by easing the pressure on supplies from other regions.
Trump's new contention, nonetheless, is that India should offer "zero tariff" for US goods import into India, and this is literally an unworkable equation. Thus, the standoff is graduating into one of the biggest trade brawls at a time when the US administration has not been able to settle down with China, Canada and major European partners over tariffs and concessions. Pakistan, apparently, was smart enough to get away with 19% tariffs — a rolled-down equation in adverse circumstances.
This singling out of India is likely to have an impact in strategic terms with the US, as Delhi has no choice but to stick to its oil imports from Russia that account for one-third of its consumption. Will this jeopardise the special relationship Trump and Indian PM Narendra Modi were eager to strike in South Asia in terms of containing China is anybody's guess. India would be better advised to value regionalism, and open new vistas of cooperation with Beijing as well as Islamabad. There is a lot in geo-economics to share, and India's attitude of segregation is costing connectivity and prosperity in the region.