Focus on trade when dealing with Trump
Investment, the 3.5 million diaspora and 200,000 students in US varsities give this relationship a new dimension
Donald Trump’s first post-Inauguration speech to a joint session of US Congress last month did serve to calm somewhat the frayed nerves in Washington. But it did not last long, as tweeted allegations of Obama having ordered wiretap on his phone during the campaign, prompted sharp denials and hitherto unmet calls for substantiation.
Recent public opinion polls, showing the highest disapproval ratings for a new President, were believed to have prompted the change in tactics. Despite sustained criticism for unpredictability and volatility in his responses, the Republican base has remained loyally supportive. He had sought to consolidate this support by continuing with the pre-election rhetoric, and signing a flurry of executive orders projected as fulfilling campaign promises. The independent voters, however, who had helped carry him past the post, now seem anxious.
The Democratic party, and its members in Congress, remain determinedly adversarial. In a manner similar to the Republican stalling tactics during the Obama administration, they have decided to come out in complete opposition to Trump and his agenda, despite their normal support for plans for job creation and infrastructure construction. The Trump-prompted Republican effort to modify the Obama healthcare provisions has given them another coalescing peg.
The ‘spring shoots’ of the Trump order are now visible. The Administration will define itself as pursuing a core ‘nationalist’ agenda, both economic and political.
This economic agenda will entail working on bilateral, rather than multilateral, trade and economic arrangements, in the assessment that US strengths give it better leverage in this framework. Taxes and tariffs would be oriented towards attracting investment and manufacturing in US, and publicly touting new investment decisions. The net impact, however, will be affected by job displacement due to technological change, and reduced demand from adversely affected trading partners.
Political nationalism would involve the US stepping back further from what is seen as unnecessary international entanglements. 9/11 had generated political compulsions for Bush to get deeply involved in Afghanistan. The flawed involvement in Iraq had prompted Obama to look negatively at any similar involvement in Libya and Syria. Unusual for recent US Presidents, Trump said in his joint session address that the US respects the “sovereign rights of nations” and the “the right of all nations to chart their own path”. This is a far cry from US belief in its exceptionalism, and being a model for rest of the world.
A key section of the new White House, led by adviser Steve Bannon, is believed to be a strong advocate of a nationalism not constrained by multilateral institutions and principles. It supports further augmentation of military capacity, and dealing with others on the basis of strength and transactional advantage. There is a preponderance of military personnel in new appointments to the National Security Council. Civilian posts of secretaries of homeland security and defence are also being occupied by former military officials. Trump has repeatedly said that the military budget would be raised, despite US already spending more than the next nine countries. There is also talk of cutting the budget of USAID and diverting it to the Pentagon.
In foreign policy there has been some course modulation. Trump has now spoken of strongly supporting NATO, which he had earlier described as obsolete. In his conversation with the Chinese President on February 9, he reiterated the ‘One-China’ policy, while questioning it before. He has now referred to sharing “vital security interests” with allies, while so far decrying alliance commitments.
Other countries are still watching the evolution of the Trump presidency with anxiety and a continuing sense of uncertainty. Those with key stakes in the relationship have attempted to reach out and initiate the process of dialogue and bargaining with the new parameters. The prime ministers of UK, Japan, Israel and Canada have visited, as have the foreign and defence ministers of Germany. Chinese State Councillor Yang Jiechi briefly met Trump during his call on the US NSA on February 27.
There was no reference in the joint session address to Afghanistan. The focus has clearly shifted to ISIS. North Korean missile programmes are being described as potential threats to US mainland. Pakistan, which has over the decades managed a relevance to US policy by aligning itself during the Cold War, then in the reaction to the Soviet intervention in Afghanistan in 1979, and now after 9/11, will need a new reason.
India would also inevitably fine tune its approach keeping in mind the new politics and priorities in US. The Indian foreign secretary had meetings with senior US officials earlier. The India-US political convergence and defence partnership had increased substantially over the past three presidencies of Clinton, Bush and Obama. A special effort would now be needed to look at the dimensions of the economic partnership. This has been an area of recurrent problems and disagreements. India being under the Special 301 watch list, and problems related to H1B visas are among the manifestations. It is no doubt in our interest to build our relations with all the major poles in the desired multipolar international system, so as to maintain the autonomy of our decisions. However, the trade and investment dimension, the nearly 3.5 million strong Indian origin diaspora, around 200,000 Indian students in US universities, give a particular overall dimension to this relationship. As we promote Make in India, including in defence, and seek partnerships for Start-up India in the US Silicon valley, an overall politico-economic narrative for the relationship will help soften the all-too-frequent bumps. And, even as we seek to consolidate it under a Trump administration, we should not lose sight of need to sustain the bipartisan support for the relationship.