NEW YORK – Last night, at 8:47 p.m., as the opening Democratic debate was minutes away from broadcast, President Trump sent out this terse and tense volley of a tweet: ‘I look forward to speaking with Prime Minister Modi about the fact that India, for years having put very high Tariffs against the United States, just recently increased the Tariffs even further. This is unacceptable and the Tariffs must be withdrawn!’
Trump landed in Osaka today for the G20 Summit, where he will meet Modi and Putin too, on Friday. He carried on his tirade of complaints against allies, sparing not even hosts Japan, and Germany.
“Almost all countries in this world take tremendous advantage of the United States,” Trump told Fox News. “It’s unbelievable, OK?”, and then had this to say about staunch ally Japan, after saying that the US are obligated to protect Japan in wartime: “but if we’re attacked, Japan doesn’t have to help us at all … They can watch it on a Sony television.”
Trump seemed to be in a better mood before his meeting with Australia Prime Minister Scott Morrison, at a working dinner, telling reporters in Osaka, today, “We’ve been very good to our allies – we work with our allies, we take care of our allies.”
However, the tweet reprimanding and warning India, no doubt, caused a great deal of consternation and embarrassment across the aisle. Coming as it did on the heels of a high profile visit to New Delhi by Secretary of State Mike Pompeo, which seemed to have gone well, after meetings with Modi and newly minted India’s External Affairs Minister S. Jaishankar, with firm affirmations to bolster business and strengthen bilateral ties.
“Great friends are bound to have disagreements. The United States has been clear we seek greater market access and the removal of trade barriers in our economic relationship,” Pompeo said in a joint declaration in New Delhi, after his meeting with Modi and Jaishankar, adding, “And today, I address these differences in the spirit of friendship and I think that the two of us will be able to see a good outcome for each of our two countries.”
Trump’s new tweet decimated all that bonhomie. The US and India are now back to square one. Officials are scratching their heads on how to go about doing normal business, which includes business worth billions of dollars in defense deals in the pipeline. There’s no question of who will blink first, though. Trump has made it clear he wants India to back off on tariffs. Even if Modi gives him a warm hug.
US-India bilateral trade was worth $142 billion in 2018, a sevenfold increase since 2001, according to US figures, reported the BBC. The tariffs that Trump referred to in his tweet is the outcome of the US ending the Generalized System of Preferences for $5.6 billion worth of Indian exports – previously duty-free in the US, earlier this month. India since then put in retaliatory measures, hiking tariffs on some US exports.
The tit for tat provocative game has been going for over a year now: in 2018, India retaliated against US tariff hikes on aluminum and steel by raising its own import duties on a range of goods.
Trump has also threatened to impose sanctions if India purchases oil from Iran and goes ahead with plans to buy Russian S-400 anti-aircraft missiles, which came up for discussions during Pompeo’s visit, noted the BBC. India has since then made it clear that it would not tolerate interference in its dealings with Russia.
It’s likely that a variety of factors leading up to the new tariffs hike by India has irked Trump, and made him tweet his displeasure in such stark terms, on the eve of a meeting with Modi.
Another factor could be a new development at the WTO. Reuters reported today, India won a World Trade Organization challenge to solar industry incentives in eight US states, although the US told the panel the ruling would have little or no impact.
India brought the dispute to the WTO in 2016 after a successful US challenge to India’s own solar power policies, which Washington said had cut U.S. solar exports to India by more than 90%.
The WTO panel upheld India’s claim that California, Connecticut, Delaware, Massachusetts, Michigan, Minnesota, Montana and Washington had broken the rules by incentivizing the use of local content, thereby discriminating against Indian and other imported solar suppliers.
It’s not easy for India to ignore Trump’s threat.
Trump’s action in the recent past make it clear that he is a hard bargainer, not afraid of consequences by quashing bilateral treaties if he feels America is getting a raw deal.
Dangling like the sword of Damocles over India is the threat of H-1B visa country caps – a huge slash in work visas for Indian nationals, which the US made it clear it would implement, if India were not to play ball on data storage rules for some multinationals.
Going into battle mode to get four more years in the White House from voters, and raising the bar for his Democrat opponents, Trump’s priorities are clearer than on his campaign trail the first time around, in 2016: Other countries be damned. America comes first.
(Sujeet Rajan is Executive Editor, Parikh Worldwide Media. Email him: email@example.com Follow him on Twitter @SujeetRajan1)