Above: Modi with Donald and Melania Trump/Photo: UNI
The impact of higher US tariffs on Chinese goods may help India, but the US president also withdrew the special status for Indian exports to the US
By Kenneth Tiven in Washington
In the history of short-attention- span politics in America, there have been few practitioners as accomplished as President Donald Trump. Democratic Party leaders and millions of party adherents are concerned about a constitutional crisis over the Mueller report’s indication of presidential obstruction of justice in covering up election interference by Russian intelligence agencies. Trump, however, has declared the “case closed” and moved on to new distractions.
Besides several rage moments on Twitter, the president’s two key moves have been (1) imposing an immediate additional $34 billion tariff on Chinese goods, which effectively stalls or scuttles current trade negotiations and (2) sending a Navy aircraft carrier to waters off Iran. This will make the busy Straits of Hormuz even more dangerous. The starker the confrontation, the more likely that fuel prices will go up.
India’s crude oil imports from Iran have been declining since November 2018 due to US-ordered secondary sanctions targeting Iran’s energy sector. But India needs some Iranian oil to meet the rising domestic demand for fuel and the Saudi oil comes via the same waterway. The impact of higher tariffs for Chinese goods might help India in the short run, but Trump is unpredictable, because the details of policy are rarely at play here. Bullying people over money has been a standard Trump business tactic for decades and he is clearly running government with the same attitude. His administration is using every possible legal manoeuvre to frustrate Congressional and other probes into his actions.
While the tariffs imposed on China cover a wide range of goods and materials, strangely, clothing and shoes are exempted. That may have something to do with the fact that First Daughter Ivanka Trump’s fashion company sells these and nearly all are made in China. The tariff fight with China is more about disrupting global trade and less about money. Trump’s trump card is chaos. This was obvious in March when he decided to strip India of the special status that exempted billions of dollars worth of Indian exports from American tariffs. His grouse against New Delhi focused on the Indian tariffs on imported motorcycles. As a result, Harley-Davidson opened a factory in Bawal, Haryana. Of the more than 3,000 Harleys sold last year, those made in Bawal avoided tariffs.
Even something as traditional as the annual Independence Day celebrations on July 4 in Washington is a platform for Trump to pick on someone. The president has taken it upon himself to reshape the celebrations with the aim to make it into a Trump-focussed event. Thrilled by the French Bastille Day parade he attended in Paris, Trump has taken a very personal interest in this year’s event.
In February, he tweeted that “we will be having one of the biggest gatherings in the history of Washington, DC, on July 4th” and that it would include “entertainment and an address by your favourite President, me!” Trump wants to rename it “A Salute to America” instead of the traditional “Fireworks on the Mall”.
This is clearly the motive, a distraction that simultaneously angers the Opposition and amplifies the enthusiasm of his cult-like followers.
But it is unlikely that such distractions are enough to make the opposition to the president back off from pursuing the full Mueller report and perhaps voting for articles of impeachment to set up a trial in the Senate. Republicans, of course, appear least concerned, finding safety in the majority they command in the Senate.
— The writer has worked in senior positions at The Washington Post, NBC, ABC and CNN and also consults for several Indian channels