Tariff-Weaponisation and Its Global Implications

The article discusses the strategic implications of tariff-weaponisation by the United States under President Trump, highlighting its impact on global economic and geopolitical dynamics. The analysis is framed around three main motivations driving these strategies, along with their consequences and lessons for India.

Motivations Behind U.S. Economic Warfare

• Appealing to Domestic Politics:
  • Trump's policies target America's "silent majority" and address grievances stemming from globalization, like wealth concentration and inequality.
  • This has led to xenophobic and nationalist policies disguised as economic populism.
• Strengthening U.S. Economic Position:
  • Despite the economic burden on American companies and consumers, tariffs are intended to bolster U.S. economic power.
  • The U.S. aims to maintain its global GDP dominance against rising powers like China.
  • There are significant subsidies and protectionist measures in place to safeguard American industries.
• Countering Global Influence:
  • Tariffs are also tools to curb China's growing influence and assert American national security.
  • Despite sanctions and tariffs aimed at strategic goals, bipartisan support exists for limiting China and addressing deindustrialization.

Consequences and Challenges for India

• Geopolitical Reassessment:
  • India must reassess its strategic alignment with the U.S., especially considering renewed U.S. relations with Pakistan.
  • There is a need to manage bilateral tensions and focus on strengthening India's strategic position.
• Economic Implications:
  • U.S. tariffs have severe impacts on India's export sectors such as textiles, jewellery, and auto components.
  • India should assert its interests and confront aggressive U.S. trade policies.
• Foreign Policy Strategy:
  • India's foreign policy needs recalibration, moving away from personalized diplomacy and towards strategic multi-alignment.
  • The country must leverage current global crises to reshape the geopolitical landscape in its favor.

Recommendations for India

• Championing Multipolarity:
  • India should advocate for a multipolar world order, countering both unipolarity and bipolarity.
  • An equitable New Economic Deal is needed to address global imbalances, particularly for the Global South.
• Addressing Structural Challenges:
  • The government must tackle issues like low manufacturing output, high unemployment, and stagnant private investment.
  • Building trust among economic stakeholders and fostering equitable growth are crucial for attracting investors.
• Forging Strategic Alliances:
  • India should invest in building relationships with diverse global stakeholders and pursue a bipartisan consensus.

In conclusion, India needs a strategic recalibration to navigate the current geopolitical and economic landscape effectively. This includes reassessing alliances, addressing internal economic challenges, and advocating for a more balanced global order.