New Delhi: Trump has a lot of promises to keep. Almost no one outside America wanted him to return, except the American voters who saw a messiah in him. Now, he has to deliver on the promises he’s made.
Why are manufacturers worried about Trump?
Ever since he assumed office, Trump has started a tariff war, imposing a steep 25% tariff on Canadian and Mexican goods along with a 20% tariff on Chinese imports. These tariffs are in-line with his campaign promise of ‘Making America Great Again’ which resonated with the bulk of the unhappy, indebted American voter who see cheap imports as a threat to their livelihoods.
Though he won the presidency based on ‘populist’ themes- better economic opportunities, fair trade practices and affordable healthcare, he knows that he has limited room to take drastic actions without consequences.
How India is in a better position
Although China, Mexico, Canada and India have trade surpluses with the US, India does not feature in Trump’s protectionist rhetoric as its economy is not dependent on exports to the US, unlike Mexico and Canada, where almost 80% and 75% of all exports respectively are shipped across the border. India’s large domestic market offers US firms way more than Mexico and Canada have- a market for their goods, skilled talent and a reliable outsourcing destination for highly skilled work. China has a much more complex relationship with the US- it remains the world’s largest exporter and a geopolitical threat to US hegemony, just as the Soviet Union was during the Cold War.
India, on the other hand, has just a miniscule 4% share of the total US imports, and its imports are not of that concern as those from the three countries Trump has specifically targeted.
Should we worry about Trump’s populist rhetoric?
Yes, and No.
Since he assumed office, Trump has sent back more than 300 illegal immigrants to India. Though estimates suggest there are more than 70 lakh undocumented Indians living in the US, those who are waiting for green cards are also worried.
Trump has already deployed 60% more troops to the Mexican border, and has halted hearings of asylum seekers without reason. This is part of his policy to stop illegal immigrants once and for all.
Could this be the start of another Cold War?
This is highly unlikely. Global supply chains are spread out across the world, and any whimsical tariff war could result in consequences for the US as a world power in the long term and cost Trump his presidency.
Though Trump needs to fulfill his campaign promises, he knows his rhetoric has limited credibility. Americans saw hope in Trump, how well he manages to convert their hope into opportunity without ruffling feathers remains to be seen.
