Tariff War On India: Trump's Words And Our Scriptures

NDTV

2 days ago

For the past two months, the United States President, Donald Trump, has been on an escalatory trajectory vis-à-vis India to browbeat New Delhi into making import tariff concessions deeper than the latter is willing to make. First, he gradually ramped up his rhetoric, calling us names ("Tariff King", "dead economy"), peppering it with isolated and unrelated examples of unfair/unethical conduct (from Harley-Davidson motorcycles to buying Russian oil). A "retaliatory" tariff of 25% was imposed on July 31, to be followed by another equal dose on August 4 as a "secondary tariff" for buying Russian oil. As of now, India's mainstream exports to the US invoke a 25% duty, which would rise to 50% on August 27. This campaign has been accompanied by overtures towards Pakistan and Bangladesh and greater discretion towards China. He has done so, ironically, while periodically gushing about good/strategic ties with India and high respect for our Prime Minister.
Is There A Method To This Madness?
India has officially criticised these measures as "unfair, unjustified and unreasonable". Many observers have panned them for reversing the hard-earned bilateral gains of the past quarter of a century. Yet, there is a need to look objectively for a method in this apparent madness and devise a counter strategy.
A good starting point for such an analysis would be Donald Trump's ghost-authored 1987-published book titled Trump: The Art of The Deal. This book begins with the author's confession of sorts: "I do not do it for the money. I have enough, much more than I'll ever need. I do it to do it. Deals are my art form. I like making deals, preferably big deals. That's how I get my kick." Later, the 369-page narcist tome yields several other relevant "pearls of wisdom", which also need to be factored in:
"I like thinking big. I always have. To me, it's very simple: If you're going to be thinking anyway, you might as well think big";
"I aim very high, and then I just keep pushing and pushing and pushing to get what I'm after";
"Sometimes I settle for less than I sought, but in most cases, I still end up with what I want."
"I never get too attached to one deal or one approach...I keep a lot of balls in the air, because most deals fall out, no matter how promising they seem at first."
"I always go into the deal anticipating the worst. If you plan for the worst - if you can live with the worst - the good will always take care of itself."
"I like to think that I have that instinct. That's why I don't hire a lot of number-crunchers, and I don't trust fancy marketing surveys. I do my own surveys and draw my own conclusions."
"The worst thing you can possibly do in a deal is seem desperate to make it. That makes the other guy smell blood, and then you're dead."
"In most cases, I'm very easy to get along with. I'm very good to people who are good to me. But when people treat me badly or unfairly or try to take advantage of me, my general attitude, all my life, has been to fight back very hard."
The two phrases in italics in the last two bullets could explain Trump's specific hardline on India: he thinks Indians are desperate for a deal, and he has convinced himself that Indians are taking advantage of the US. To successfully make a deal, we would need to disabuse him of his twin misperceptions that we are "deal-desperate" and that we have treated the US "badly or unfairly".
Some caveats on the above would not be out of place:
Trump's tariff strategy is neither irrational nor whimsical: it is an integral cornerstone of "Make America Great Again" and his campaign's "Project 2025".
These quotes are from his book, allegedly ghostwritten nearly four decades ago. Although he continues to stand by it, the time has presumably matured him somewhat;
The book's context of Donald Trump as a real estate and casino mogul is starkly different from being President of a country; in particular, his abrasive, insolent style as a tycoon is unsuited for the sophistication needed as the President of the world's most powerful country and largest economy.
Both as a megalomaniac and second-term president, he is deeply interested in leaving a positive legacy to paper over a controversial and attention-grabbing "colourful" life.
As someone who coined the term "truthful hyperbole", he is dismissive of the arguments and data that expose him.
Despite his self image of a transactional deal-making maestro, he has frequently failed dismally, forcing him to back-off: prominent of these include botched acerbic litigation against the tenants of a New York Central Park Apartment bloc he wanted to take over, his high-profile attempt to duplicate the National Football League of America, and the 2019 deal with Taliban that led to a humiliating US withdrawal from Afghanistan. He has tried to paper over these and other disasters.
Despite plenty of heat, there has been little light so far in Trump-II, with his domestic approval rating sharply down (37% by Gallup), constant run-ins with the Federal Reserve, media, Elon Musk, sections of the US Congress and even his MAGA base. Thanks to his frequent shifts, he has earned an unwelcome epithet of 'TACO' (Trump always Chickens Out).
His boast of near-mythical negotiating prowess has already been upended by leaders of major foreign powers as Xi, Putin and Lula. His takeover bids for Gaza, Greenland, Canada and the Panama Canal, as if these were real estate properties in downtown Manhattan, have exposed his naivete. No wonder the White House is desperately looking for major success to impress its MAGA base. Ironically, right now, the US President is reduced to being a deal desperado - something he strongly advised the dealmakers against!
Against this darkening backdrop, he has now zeroed in on India as a "manageable target", setting up an epic and nervy tryst.
One does not expect Trump to be knowledgeable about the ancient Indian negotiating strategy, but his approach towards India seems to have a near overlap. Our Matsya Purana scripture describes Lord ShriHari himself revealing to Manu the four tenets of negotiating strategy based on Sam (Flattery), Dam (bribery), Dand (Punishment) and Bhed (Dissension). Eerily, Trump's recent posturing towards India can be seen through this ancient policy prism. He has used Sam ("India and Modi are our great friends", but...), Dam (bilateral strategic partnership, trade agreement, F-35, etc.), Dand (high tariffs and hot air) and Bhed (sowing domestic blame game in India about 'dead' economy, hobnobbing with Pakistan, Bangladesh and China, etc.).
What India Must Do
How does one devise a counter-negotiating strategy against Donald Trump's vicious assault on India? Above all, we must believe it to be a long haul and avoid any signs of panic or desperation. After all, Iran has been under US sanctions/embargo for over 45 years, and Russia has been subject to nearly 10,000 US sanctions for over three years. On Trump, we are generally on the right track, though the following inputs can be helpful:
Sam: While any flattery would be misplaced at this stage, we should maintain the rational, calm dialogue without showing any desperation for an early bilateral deal and emphasise our strength and an equality of treatment. As the White House has precipitated the bilateral crisis, the onus for resolving it lies on them.
Dam: We can dangle the potential gains for the US economy from our market opening proposals in a deal. If Washington continues to play hardball, we can expedite our trade deals with other comparable countries to shrink the domain left for America in the Indian market and show it that time is not on its side. This can be particularly true of the major technical standards being adopted for the future. Our generics form 47% of medicines sold in the US and give us a strong handle. We dominate vaccines and IT back-office space that are crucial to the Americans. We should hold back on major bilateral deals and procurements with the US until the tariff situation is sorted to our satisfaction.
Dand: We need to be clever here, but also careful to avoid further escalation. While exuding confidence and strength, we should maintain an enigmatic silence about our negotiating posture on the concessions that the US seeks. Other diplomatic options may range from greater coordination with BRICS and independent initiatives to strengthen our ties with the Global South, with a particular emphasis on regions where we have an intrinsic advantage, such as the Middle East and Africa, as well as the region that the US is more possessive about, such as Latin America
Bhed: It's quite evident that most sections of the US bureaucracy are not on the same page with Trump's tariff wars strategy. We can engage such sections, particularly in the State and Defence Departments. We can also cultivate the influential US media outlets. With looming Congressional elections next year, we can zero in on the constituencies with major Indian presence. The deafening silence of the over 5 million-strong Indian community, which includes billionaires, CEOs and political bigwigs on this issue of core interest to India, is quite puzzling and shows a huge lacuna in our soft power that needs plugging. The American companies with major interests in India, especially the FAANGs (Facebook, Amazon, Apple, Netflix, and Google), for which India is the world's biggest market, should be persuaded to lobby for the de-escalation of the tariff war.
Though Trump has indulged in megaphone demagoguery against India on social media with his MAGA base in anticipation of his triumphal opening of the Indian market, we should not play his game. We should be resolute and "fight back harder" than him, while also leaving him an exit for a climbdown. To quote another ancient Indian adage, this time from Vidur Neeti, subsequently endorsed by Chankya: "शठे शाठ्यम समाचरेत्" - or, "Tit for Tat", a globally well-understood Americanism.
(Mahesh Sachdev is a retired Indian Ambassador. He currently heads Eco-Diplomacy and Strategies, a Delhi-based consultancy)
Disclaimer: These are the personal opinions of the author