Let me confess. It was Arnie who is said to have coined the phrase; ‘let no crisis go to waste’. I always thought it was insightful and even funny. But Trump’s 50 per cent tariffs on Indian exports to the United States will only make India stronger. The key is not to let the tariff crisis go to waste.
The use of tariffs as political whips is just one indicator of America’s decline. What the world is witnessing is nothing less than a collective loss of trust in the American form of government, its major institutions and the legal framework weaving its complex democratic geometry together.
The erosion of trust in America may well prove its weakest link, one that dissolves the ties of tested global friendships, demolishes the architecture of US backed international institutions, and badly erodes US Soft Power. The process of American decline has begun. It is all but impossible to reverse.
The US White House today can be accused of many things. An excess of originality is not one of them.
Tariffs and quotas, combined with piracy, armed robbery, abductions and slavery, are painfully familiar in the former colonies of Asia, South America and Africa. As in the days of colonial expansion, tariffs and non-tariff barriers came as one unwelcome, cruel package. Land quotas for indigo cultivation in India, the Opium Wars in China, the opening of Japanese trading ports following the Captain Perry’s bombardment of Osaka, bonded labourers from India sent to lay railway tracks in Burma and Malaya, slave fuelled sugar plantations in Brazil and cotton picking in the American South are all notable examples of a mercantilist approach to economic policy.
The lessons are firmly imprinted on the minds of the peoples of colonised Asia. For them, the only effective response to a recasting of mercantilism in modern garb is not a fawning recantation of some supposed sins. It is to stand up to a modern day would be Napoleon: enraptured by dreams of colonial expansion in neighbouring Canada, Greenland and Panama.
Such is the reality of 21st Century USA under Trump II. It is tragic but historically familiar.; capricious but predictable. It is dangerous but not strategic. The desired and effective response is not to play the game a’ la Trump. The 21st Century is not the 16TH. The world has changed. The Trumpian assault can be resisted and overcome. We cannot afford to waste this crisis.
Domestic Responses to the US tariffs: China, India and Indonesia
Trump has galvanised public opinion against America more than any other leader in modern times. This is demonstrated in the fracturing of long held alliances with Europe, Latin America and above all in Asia. As can be expected this has led to a determined search for alternative export markets as well as the use of monetary and fiscal policies to raise consumption in domestic markets.
The search for self-reliance and reduced dependence on the US does begins with the supply of essential basic goods. Food and medical security is another part of the same intended response. Mutual learning on food production, storage, distribution and pricing at a near universal scale demonstrate the resolve of the independence spirit. Cooperation in medical research, production of key vaccines and supplements, the establishment of a medical reserve on parallel with a food reserve are all steps in the same direction.
This is not all. Human and physical security concerns are accompanied by a refusal to side with the insanity of Trump’s neglect of the environment and the reversal of climate friendly policies, commitment and funding. India, China and Indonesia are all committed to the reduction of carbon emission and net zero policies. China has already dazed the world with its exceptional record of electric vehicle output and advances in solar energy.
In the field of defence, significant planned increase in defence spending is intended to reduce reliance on any US military umbrella, especially in Japan and Korea. The same is likely to be true of India and Indonesia.
In areas of human capital: path-breaking research in digital, industrial/material technologies, bio-technology and genetic engineering and the management of global pandemics; space exploration and Artificial intelligence; in the methods of transport, biometric verification and cyber security all illustrate the dynamism and foresight of Asian experts. The short sighted crackdown on student visas and admissions to Ivy League American Universities is likely to prove a boon, a Trump dividend if you will, to China, India and Indonesia.
In addition, the major countries of Asia are characterised by high saving rates, family solidarity that values education and inter-generational transfers of income and wealth. This is in sharp contrast to the credit-card, debt-dependent, consumption habits of the advanced West, especially the United States. Shortages of American chewing gum, mobile phones, Hollywood films, communication apps and financial services are unlikely to prove an unbearable burden to Asian consumers.
Then there is the so called “mighty dollar”. The open spat between the White House and the American Fed, does not bode well for either of the two famous attributes of the US Dollar. If the FED is brought to heal, the trust in the dollar under the spirited Trump will sharply decline. Trade in local currency for a range of essential goods may well become a serious possibility.
All in all, large Asian countries, together with some of the Globe’s most resource rich nations: Russia, Brazil, South Africa, with support from at least a share of countries in the developed world, have many tools at their disposal to resist the onslaught of Trump’s tariffs.
Despite all the talk, the quips, the wilful body language, the people of the United States have been ill served by the enfant terrible in the White House. The silver lining is that he has unleashed a global rethink of the drivers of the coming Multipolar World. In his bid to make America Great he has only succeeded to make the rest of the world just that much greater.
The contributor is Executive Director, The Arthashastra Institute, Indonesia
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com)
The use of tariffs as political whips is just one indicator of America’s decline. What the world is witnessing is nothing less than a collective loss of trust in the American form of government, its major institutions and the legal framework weaving its complex democratic geometry together.
The erosion of trust in America may well prove its weakest link, one that dissolves the ties of tested global friendships, demolishes the architecture of US backed international institutions, and badly erodes US Soft Power. The process of American decline has begun. It is all but impossible to reverse.
The US White House today can be accused of many things. An excess of originality is not one of them.
Tariffs and quotas, combined with piracy, armed robbery, abductions and slavery, are painfully familiar in the former colonies of Asia, South America and Africa. As in the days of colonial expansion, tariffs and non-tariff barriers came as one unwelcome, cruel package. Land quotas for indigo cultivation in India, the Opium Wars in China, the opening of Japanese trading ports following the Captain Perry’s bombardment of Osaka, bonded labourers from India sent to lay railway tracks in Burma and Malaya, slave fuelled sugar plantations in Brazil and cotton picking in the American South are all notable examples of a mercantilist approach to economic policy.
The lessons are firmly imprinted on the minds of the peoples of colonised Asia. For them, the only effective response to a recasting of mercantilism in modern garb is not a fawning recantation of some supposed sins. It is to stand up to a modern day would be Napoleon: enraptured by dreams of colonial expansion in neighbouring Canada, Greenland and Panama.
Such is the reality of 21st Century USA under Trump II. It is tragic but historically familiar.; capricious but predictable. It is dangerous but not strategic. The desired and effective response is not to play the game a’ la Trump. The 21st Century is not the 16TH. The world has changed. The Trumpian assault can be resisted and overcome. We cannot afford to waste this crisis.
Domestic Responses to the US tariffs: China, India and Indonesia
Trump has galvanised public opinion against America more than any other leader in modern times. This is demonstrated in the fracturing of long held alliances with Europe, Latin America and above all in Asia. As can be expected this has led to a determined search for alternative export markets as well as the use of monetary and fiscal policies to raise consumption in domestic markets.
The search for self-reliance and reduced dependence on the US does begins with the supply of essential basic goods. Food and medical security is another part of the same intended response. Mutual learning on food production, storage, distribution and pricing at a near universal scale demonstrate the resolve of the independence spirit. Cooperation in medical research, production of key vaccines and supplements, the establishment of a medical reserve on parallel with a food reserve are all steps in the same direction.
This is not all. Human and physical security concerns are accompanied by a refusal to side with the insanity of Trump’s neglect of the environment and the reversal of climate friendly policies, commitment and funding. India, China and Indonesia are all committed to the reduction of carbon emission and net zero policies. China has already dazed the world with its exceptional record of electric vehicle output and advances in solar energy.
In the field of defence, significant planned increase in defence spending is intended to reduce reliance on any US military umbrella, especially in Japan and Korea. The same is likely to be true of India and Indonesia.
In areas of human capital: path-breaking research in digital, industrial/material technologies, bio-technology and genetic engineering and the management of global pandemics; space exploration and Artificial intelligence; in the methods of transport, biometric verification and cyber security all illustrate the dynamism and foresight of Asian experts. The short sighted crackdown on student visas and admissions to Ivy League American Universities is likely to prove a boon, a Trump dividend if you will, to China, India and Indonesia.
In addition, the major countries of Asia are characterised by high saving rates, family solidarity that values education and inter-generational transfers of income and wealth. This is in sharp contrast to the credit-card, debt-dependent, consumption habits of the advanced West, especially the United States. Shortages of American chewing gum, mobile phones, Hollywood films, communication apps and financial services are unlikely to prove an unbearable burden to Asian consumers.
Then there is the so called “mighty dollar”. The open spat between the White House and the American Fed, does not bode well for either of the two famous attributes of the US Dollar. If the FED is brought to heal, the trust in the dollar under the spirited Trump will sharply decline. Trade in local currency for a range of essential goods may well become a serious possibility.
All in all, large Asian countries, together with some of the Globe’s most resource rich nations: Russia, Brazil, South Africa, with support from at least a share of countries in the developed world, have many tools at their disposal to resist the onslaught of Trump’s tariffs.
Despite all the talk, the quips, the wilful body language, the people of the United States have been ill served by the enfant terrible in the White House. The silver lining is that he has unleashed a global rethink of the drivers of the coming Multipolar World. In his bid to make America Great he has only succeeded to make the rest of the world just that much greater.
The contributor is Executive Director, The Arthashastra Institute, Indonesia
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com)
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