Trump’s ‘hammer diplomacy’ can hurt US, but has a silver lining for India

Tara Kartha

President Donald Trump’s Congressional address was as expected, tickboxing a great many issues, even while cherry picking facts and throwing figures around that were palpably untrue. But here’s the thing. He is getting results, at least for now, and that’s something, even if one may disagree with his objectives or methods. His style is likely to be even more appreciated, as the much-touted London Conference on Ukraine ended by saying that they would work with the United States on a peace plan and carefully avoided any commitments to sending troops for any reason whatsoever.

Advertisement

Hammer diplomacy and victory

The congressional address was according to polls received with acclaim across the country, with 76 per cent approval ratings. Domestic issues, like ending wokeism and gender neutrality, will be seen as progressive and highly required by even those outside the country. Favourable margins in polls, however, start thinning when he talks of moving swiftly on illegal immigration, given that the assumption that all of these are criminals is patently untrue and the fact that many, including Indians, are being deported to other countries under difficult conditions.

Trump also tickboxed issues where he could claim to have gotten what he wanted. That he didn’t is surprising, but the reality is that his threat to ‘reclaim’ the Panama Canal has sent its government hurrying, to pull out of the Chinese BRI (Belt And Road Initiative), while reports indicate that US giant BlackRock has reached agreement to purchase two of the ports on either side of the canal that were being run by a Hong Kong based company. That’s pretty swift work. Besides, BlackRock has also acquired 43 other ports worldwide. It’s not just about Panama. It’s a strong pushback against the Chinese infrastructural giant worldwide.

You May Like

This Rs.1999 Smartwatch Surprises The Whole CountryCrossFitRead More

by Taboola 

Sponsored Links 

Ukraine loses a pack of cards

Then there is an apparent caving in of President Volodymyr Zelenskyy, who sent a letter not only hailing the US president’s efforts at peace but also said on the minerals and security agreement that “Ukraine is ready to sign it at any time that is convenient for you (the US president)”. But the language of this ‘letter’ seems to be remarkably similar to a tweet put out by Zelenskyy, where he, however, also links the whole to ‘greater security and solid security guarantees’, which is certainly not what Trump is likely to agree to. Neither is there any hint of an apology.

But then Zelenskyy also seems to be an astute politician, so the possibility that he wrote one thing in a letter and another in a tweet is likely. Besides, he also bookmarks the ‘agreement’ reached at London, where he was feted by the Europeans, though the end result might not have been what he wanted. The chair’s statement after the conference does commit more arms ‘aid’ . It also commits to increasing European defence capability, but that is not of immediate use to Zelenskyy, since for all practical purposes, Europe continues to lean on the US for its defence.

Advertisement

Trump leans on Europe

Meanwhile, it is Trump who is likely to ‘lean on’ Europe, with a tariff war of 25 per cent, rather like a gangland boss with a sawn-off gun. The Congress speech promised immediate tariffs on Canada and Mexico of a hefty 25 per cent, and oddly, tariffs on China were lower at about 20 per cent. He also mentioned India in his tariff threats, but that was a repetition of what one already knows.

Canada’s Prime Minister Trudeau has issued his own ‘reciprocity’—worth 30 billion Canadian dollars—to begin with and the rest after a few weeks. China has announced its own slew of measures that will target Trump’s key constituency, the farmers. But most say the response is muted so far. Meanwhile it has moderated its growth projections to 5 per cent, which is ambitious by its own account, given low domestic demand and heavy export dependence.

Advertisement

Canada’s growth is worse, at 2 per cent. Trump admitted that things might be tough for a while, even as polls indicate low approval ratings on existing inflation and unease over foreign policy measures. Trade wars are dangerous things, and in his last term, a Senate analysis in 2019 showed that Trump’s trade wars hurt Americans most, losing some 300,000 jobs. Besides, the US should have learnt this lesson. It was created after just one such war—after the ‘Boston Tea Party’—as Britain’s colonies took out their own trade war to a cry of ‘no taxation without representation’.

Investment needs immigration

They do like his message on immigration. But here’s the snag. A day earlier, the White House announced new investments of $100 billion from a Taiwan semiconductor factory, $500 billion from Apple, and various others allegedly amounting to a trillion dollars. The problem there is that few of these can get off the ground without the requisite manpower, robotics notwithstanding. It is unclear where these will come from if there is a constriction in visas at any level. Workers of this level are hardly going to be ‘gold card’ aspirants.

Advertisement

At another level, Indian investment of some $40 billion in the US created some 425,000 jobs last year. Flip that, and you get another figure. In 2017, US exports to India created 260,000 jobs with exports worth some $25 billion. Now that figure has almost doubled, which means that employment figures would have increased more or less on that level. That applies to all other investors. It does seem, therefore, that tariffs will hurt US jobs in the short to medium term.

The question is whether the public and the party will continue to back the president during this period. The pushback has already begun with Trump delaying auto tariffs due to fears of auto majors—the President gives a close ear to industry leaders—and a drop of 700 points in the Dow Jones index, apparent even as he was speaking in Congress.

Advertisement

As of now, the Indian stock market, though nervous since February, has not hit a downswing after the Congressional speech, rather showing a rally based on other factors. However, if protectionism becomes the order of the day, the world economy itself will take a hit, which will have an inevitable fallout effect on India.

Meanwhile, the European Union has come calling, bearing gifts and a very large delegation that signed on to an ambitious joint statement. China’s weakening hold on the global economy and Russia’s newfound peace would be a welcome development for India. More importantly, the India-US partnership continues to flourish across multiple sectors, having achieved a comfortable level of cooperation.

That’s valuable in multifarious ways. Elsewhere is the lure of hard cash, which includes US industry’s interest in our nuclear energy market, that has sustained across administrations. It’s a tricky path, but as the wits say, so far it’s been more ‘tareef’ (praise) than trouble. Everything depends on our ability to keep the national boat stable, especially in the next few months. Watch out for trouble, especially in divisive internal issues and resultant publicity aimed at corroding that very objective. It’s really time to stand tall and together, and no time to lose. It’s only beginning with no clear end in sight.

The writer is a Distinguished Fellow at the Institute of Peace and Conflict Studies, New Delhi. She tweets @kartha_tara. Views expressed in the above piece are personal and solely those of the author.