Remember that famous one-liner by Sunny Deol of the "dhai kilo ka hath" fame? Well, just change it a little, and it describes real well the muscleman of international politics. Yes, you read it right. 'Don' Trump! And his "tariff pe tariff"!
Trump came to power with the MAGA promise to his vote bank. This "tariff" war that he has waged against the whole world is to appease his group of voters. His argument is apparently simple. America has been 'exim' targetted. Our, American, products are levied more when we export them, while we charge less when we import any. Tit for tat henceforth!
There is, of course, much much more to the trade war that has inevitably resulted. Sure, Americans have to line up for stuff as basic as toilet paper because of the sureshot backfire tariff by the rest of the world. America, too, is going to face scarcity and price rise.
That, of course, would be a temporary phase. America is absolutely aware of its military might. The gold reserves it has, and the resultant invincibility of the dollar as an international currency are "Trump" cards, anyways. So the isolationist strategy would be protectionism for the local, native, American industry, a cushion cover to grow, and fast. Thus, in the process, will America be great again.
How about the rest of the world? Is a new 1929 Great Depression looming large on the horizon? Forget the share markets, even the farm produce and the industrial products are at stake. China, the hub of not merely the raw material but of processed products (however dishy/dicey the quality may be, as the collapsing skyscrapers disaster due to the recent most earthquake proved yet again) every which way has already entered the fray!
As for India, the service industry such as the I/T, is sure to take a huge beating. America may not have the required trained manpower. But the value of the Indian manpower for sure would be halved. America, moreover, is insistent on the deportation of even the legal immigrants. Tough negotiations ahead, in brief.
As it is, America provides huge subsidies to its farmers. As a result, in addition to the I/T turf, India would have to guard its agri-products market as well. May be, the "Make in India" kind of programmes also need to be re-energised. Like China, India must present itself as the best place for the production process. Who knows? There might be a huge opportunity hiding in this difficulty!
Regional coalitions has to be another solution. In fact, the U.S. is wary of the BRICS floating an alternative currency. Such de-dollar-isation is America's real worry! That could be the solution, too, to the current impasse. The total failure of sanctions against Russia, however, should show that such tricks do vanishing the best! Anyways, we all know who all are America's coalition buddies, right?
Tough, in brief, is the future. Later this year, when America meets India at the negotiation table, sure our armour would have no chinks in it either. Let MAGA not hinder MIGA, neither the 'let the rest of the world be great, too' mo(ve)ments!
Pratima@The earthquake that the trade war has released is truly high on every scale. Equally unpredictable it is! Hope, it does not release impossible tsunamis in its wake!
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