Exclusive - "India Shouldn't Allow Itself To Be Used By US Against China": Top Economist On Tariffs

NDTV

4 hours ago

New Delhi:
India should not allow itself to be used by the US in the West's misguided trade war with China, a top American economist told NDTV.
Professor Jeffrey D Sachs, who teaches at Columbia University, also pointed at huge flaws in how US President Donald Trump worked on issues like tariffs.
"Well, in general, a one-person rule in the United States determining which countries pay which tariffs is absolutely beyond the law in the US. If you look at our Constitution, Article 1, Section 8, it says tariffs are the responsibility of the US Congress. But Trump declares emergency after emergency that are, from a legal point of view, outrageous and invalid. We should not have a one-person rule in the US," said Mr Sachs, who has advised governments in Latin America, Eastern Europe, the former Soviet Union, Asia, and Africa.
He agreed the 50 per cent tariff imposed by Mr Trump on India may affect bilateral ties which have been assiduously built up over the last several decades.
"Of course it has a negative consequence, but it merely bears out what I have been saying to dear Indian friends for years, which is that the United States uses other countries. It does not act responsibly towards other countries, so be careful. India should not allow itself to be used by the US, for example, as somehow in the US' misguided trade war with China," said Mr Sachs.
"India, I think according to at least some people, was going to become the replacement for China. The US would fight China, and it would welcome India to replace the Chinese supply chains. I said that I regarded that as unrealistic, that the US would not allow a major expansion of exports from India anymore than it would allow them from China today.
"I think that these events should give warning or pause to Indian officials. Yes, I'm not saying to arbitrarily break relations with the US, but also don't rely on them. India needs to rely on a diversified base of partners - Russia, China, ASEAN, Africa, and elsewhere, and not see itself as mainly focusing on the US market, which is going to be unstable, slow-growing, and basically protectionist," said the economist most famous for his work on reforms and with international agencies to promote poverty reduction, disease control, and debt reduction of poor countries.
According to him, a strong India-China trade and investment in technology relations would be very beneficial for both the neighbours.
"So if you look at green energy or at digital or at AI or at advanced chips, China is a good partner for India. Of course, I would be told immediately, yes, but India-China relations are strained for other reasons. But my own view is, solve those, because the benefits of the two giants really having good economic and trade and investment and finance relations would be wonderful for the two, and I think very good for the world," Mr Sachs told NDTV.
Prime Minister Narendra Modi will be going to China soon to attend the Shanghai Cooperation Organisation (SCO) summit, which marks a kind of thaw in ties since the Galwan face-off.
Mr Trump is also meeting his Russian counterpart Vladimir Putin today.
On whether Mr Trump's move to push 50 per cent tariffs on India might end up bringing India and China closer, Mr Sachs there is a real possibility.
"Absolutely. I think Trump is the great unifier of the rest of the world, that is. I think Trump is the greatest friend of the BRICS. By attacking Brazil, Russia, India and China simultaneously, he has brought all of the leaders together. There have been a flurry of calls between Lula, Putin, Prime Minister Modi, President Xi in recent days because of Trump. So he's played a very constructive role. Not the one he thought he was playing, but a very constructive role in my view," the professor said.
On the sensitive issue of India buying Russian oil, Mr Sachs said the whole point is that one person should not decide who trades with whom.
"The unilateral US measures are illegal under international law. That may sound a little quaint these days, but we actually have rules. We have international law... I don't think what Trump's doing is legal from the point of view of American law, nor do I think it's legal from the point of view of international law. Nor should the US tell India with whom to trade, nor is the whole premise correct that the US has the right to punish Russia and its partners because of the war in Ukraine. That's another issue, but the war in Ukraine in my view was caused by the United States, not caused by Russia.
"This is a war over NATO enlargement. This is very important to understand. This war goes back to 30 years of US provocation because America is very arrogant, not only Trump, the whole political class.
"And for 30 years they've said we can go where we want, when we want, how we want in security terms, including putting military bases on Russia's borders. That's why there's a war in Ukraine. And then to sanction India because of US provocations, well, the whole thing's absurd.
"So I think we went down a very bad road. The US is flailing around because Russia's winning on the battlefield, and Russia said no to the US, you don't dictate to us our security terms," Mr Sachs said.