Terms of Trade: From strategic ally to voodoo doll

WBiddy Donald ruff below the belt singled republic of india for an additional 25% tariff because of Russian oil imports – China imports more Russian crude than India – there were many theories of what led to the move. White House Counsellor for Trade and Manufacturing Peter Navarro’s opinion piece in the Financial Times on Monday has finally made things clear. India is being punished not just for buying Russian oil but also its trade with Russia in things such as military hardware.“The Biden administration largely looked the other way at this strategic and geopolitical madness. The Trump administration is confronting it…This two-pronged policy will hit India where it hurts — its access to US markets — even as it seeks to cut off the financial lifeline it has extended to Russia’s war effort. If India wants to be treated as a strategic partner of the US, it needs to start acting like one”, Navarro writes. Subsequent statements from the White House and even Trump have supported Navarrro’s arguments.To be sure, even before this blunt official declaration, there were voices, such as a Wall Street Journal Editorial, which had argued that Trump was using the additional tariffs on India to send a signal to Russia before the Putin-Trump talks that the US will do all it can (with China it cannot) to hurt the Russian oil revenues which are extremely critical to its overall economic fortunes.India, in other words, is now the proverbial voodoo doll which Trump is putting needles into to hurt a bigger adversary, namely, Putin. That the bilateral relationship has come to this from the MAGA+MIGA=MEGA wordplay Trump and Modi engaged in earlier this year, says a lot about how fast things have gone bad.Let us for a moment assume that India were to follow Navarro’s advice and align itself completely with US’s or rather Trump defined US interests. Will it necessarily entail a better future? Ukraine is the perfect counterfactual to disabuse anybody of this notion. The Financial Times has reported earlier this week that Trump has given some vague security assurances to Ukraine in the possible aftermath of a deal with the Russians on the condition that it buys $100 billion (it is almost half of Ukraine’s nominal GDP) worth of US armaments. Apparently, the Europeans will finance the buying. “Asked on Monday at the White House about further US military aid for Ukraine, Trump said: “We’re not giving anything. We’re selling weapons,” the FT reported.Trump’s conduct with Ukraine will be an important lesson for all countries who have been thinking of the US on the lines of ‘a friend in need is a friend indeed’. As is obvious, this compromises the very core of the recently brewing strategic alliance between India and the US; the project of containing China.What do all these facts entail for India’s positioning in the current world order? This is a question which ought to be asked beyond the optics of the diplomatic dance India is doing with Russia and China .Geopolitics is essentially the art of building self-serving relationships and promiscuity, ideological or vis-à-vis partners, is always par for the course. The Soviet Union was an important ally of communist China in its early phase, but China started treating it as its biggest enemy in Mao’s lifetime itself. China bombed communist Vietnam to pretty much give the same Voodoo treatment to the Soviet Union which the US is trying to do to Russia by punishing India for its Russian oil imports. West Asia is a never-ending tale of so-called strategic alliances disappearing and reappearing with the only constant feature being disorder and misery.The country/regime which eventually wins this game is not the one which is seen as winning the short-time bargain or pulling off a momentary chutzpah but the one which manages to align, or even better, shape the glacial flow of geopolitics and economics to dovetail it to its own national interest. This is where the Chinese will always be grateful to Deng Xiaoping who saw a material benefit, and not just a schadenfreude (of hurting the Soviet Union) point in making a pivot to the US.“As we look back, we find that all those countries that were with the United States have become rich, whereas all those against the United States have remained poor. We shall be with the United States”, Deng is supposed to have said onboard his aircraft while going on his first visit to the US in 1979. This premise held for almost the entire period from the end of the second world war until 2016, had some sort of a dead cat bounce under Biden and is finally atrophying under the second Trump administration. As Navarro’s FT piece suggests and Trump himself has declared multiple times, now countries that are with the US ought to make it rich rather than the other way round.The US today is an empire in decline which is making a last-ditch effort to cushion its productive capital by providing fiscal largesse at home and snatching some foreign markets abroad while making it politically palatable by selling populism as economic liberation to the underclass. This strategy boat has too many holes – fiscal deficit, debt, tariff induced inflation or even a jeopardising of the dollar’s global dominance etc. – to sail securely for long. Ultimately, a time will come when something will give.This, however, is neither going to happen tomorrow, nor is it going to be a painless exercise. What India needs to work on in the interim is clearly flag what its larger national interest is —overtures to adversaries such as China or strategic alliances which land as voodoo dolls are not – and work towards achieving this goal in the medium to long term. If all the (geopolitics in the) world is a stage, no matter how good an actor one is, a thought-out script (a long-term strategy) is absolutely essential. It is tempting to blame the actor when things go wrong, but it is usually the script that can make or break a performance.(Roshan Kishore, HT’s Data and Political Economy Editor, writes a weekly column on the state of the country’s economy and its political fall out, and vice-versa.)