Decoding Trump’s tariff tantrums

Last month, I wrote here about India’s splendid diplomatic isolation, but my prediction became fact sooner than I expected, with President Trump’s withering attacks on India. Biden drove Russia into China’s arms over Ukraine; Trump seems intent on driving India into China’s arms; and Ukraine isn’t even Asia’s problem, but a likely Chinese invasion of Taiwan would be.

There are at least four different ways in which one could rationalise the Trump position: 1. A negotiating opening gambit to soften up India 2. Frustration from the lack of leverage against Presidents Putin and Xi 3. Part of a regime-change operation planned by the Deep State and 4. A desire to force manufacturing and investment to move back to the US. I hope it is a combination of 1 and 2, and that better sense will prevail before a mutually-beneficial Indo-US relationship is damaged beyond repair. However, there is a non-trivial chance that, with prompting by Britain’s Whitehall (which created Pakistan in the first place to keep India in check), the US Deep State has decided to target India.

I wrote a couple of years ago that the Deep State, intimidated by China’s rise, might accept a condominium with it, giving each a sphere of influence. China gets Asia and the Indian Ocean; the US gets the Americas, Europe and the Atlantic; and they share the Pacific. India, Japan, Australia (i.e. the Quad), and ASEAN become Chinese vassals. So like the Vatican-brokered Treaty of Tordesillas in 1494 that divided the world between Spain and Portugal!

There is also the anti-Thucydides Trap, wherein the incumbent power (the US), instead of resisting the rise of the challenger (China), helped it grow, deluding themselves that China would be benign. However, both are now employing all possible means against new challenger India’s rise, including trying to balkanise the latter.

That is Scenario 3, the Deep State playbook of ‘colour revolutions’ against governments they don’t like for whatever reason. There is context in the BJP’s 2024 accusation that the US Deep State is trying to “destabilise” India and that efforts by the Opposition are aiding this larger scheme.

Scenario 4 makes a strange sort of sense. Trump realises the US erred badly in relinquishing manufacturing to China, and wants to pull it back; also he has no interest in India becoming a new manufacturing power. Similarly, the ‘deals’ forcing Japan, the EU, Korea et al to invest billions of dollars in the US (and Ukraine, which receives extensive international aid, has promised to spend $100 billion in the US) are extortionary: a sort of neo-imperialism.

The effort to browbeat India into buying more US weapons is part of this: Trump aide Peter Navarro grumbled that India buys 36% of its armaments from Russia. He omitted to mention that this is down from 70+% a decade ago. Sadly, US armaments and aerospace products (e.g. the F-35 and Boeing 787) are now seen as not so reliable.

The moral posturing about India’s purchases of Russian oil leading to Ukrainians’ deaths is bizarre. It’s just business, Trump aide Scott Bessent, why repeat INDI’s Ambani-Adani mantra? Remember your own ‘robber barons’ and “What’s good for General Motors is good for America”? There are many examples of profit above morals.

One is the 1973 oil price crisis, when OPEC suddenly quadrupled crude oil prices, forcing a massive transfer of wealth from developing countries, quite likely causing starvation deaths. The US could have persuaded (or bullied) OPEC into preventing the price rise. But it didn’t. Why? Because those petro-dollars were recycled into buying American weapons. The Military Industrial Complex prospered. No morality there.

There is an earlier parallel. Tipu Sultan invaded Kerala in the 1780s with a reign of terror. The British did nothing, despite a treaty with Travancore. After Tipu amassed all the looted treasure, the British killed him, and stole all of it themselves. They came out smelling of roses, and they had the loot. Two birds, one stone. No morality there, either.

Given all this, there’s one thing India needs to do urgently: gain leverage, a bargaining chip. China has rare earths, OPEC has oil. India should use the 100,000 H1-B folks who are likely to be forced out from the US to gain leverage through first-class software products.