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Dinosaur Moves


Every now and then, the ongoing ‘reshaping’ by President Trump of US economic relations with other countries focuses on India. The punitive action in itself is not as significant as the symbolism of it. The most recent threat on raising tariffs, according to reports, would affect only trade worth 250 million dollars, but these are small warning shots that Indian cannot afford to ignore. There is no doubt that the diplomats, experts, economists and the business lobby will forge a counter, as they have done earlier to, first, minimise the impact and, then, see what advantages can accrue in the overall context – for in every challenge lies an opportunity.
Trump has some backing in the US for his initiatives on ‘monetising’ all the ‘services’ the US offers the world, including its role as globo-cop. This is because, at least for the time being, the economy is showing an uptick and even employment figures are rising. Unfortunately, the net affect will be of ‘freezing’ the economy at a time when technology is rapidly changing the very fundamentals of human behaviour and needs. Very soon, this failure to adapt will result in a loss of competitiveness vis-à-vis not just China, but also India and some other emerging nations. Added to the blanket anti-immigrant policy, it could mean that, apart from certain islands of excellence in high technology, the US would have little to sell the world that would be priced right. By withdrawing from what are described as ‘unfair’ treaties and not offering anything viable instead, US is also surrendering its ‘captive’ markets, particularly for defence products.
In comparison, consider the huge market that China has captured in India with products that have met a demand that had not even been identified by local manufacturers – a direct result of the protected licence raj economy that was followed since Independence. Cheap plastic items, mobile phones, etc., that the poor could afford and made a difference to their lives have flooded the market. Many of these items were designed and manufactured in other countries like the US, Japan, Korea, Taiwan, etc., but quickly adapted by the Chinese behemoth, often by stealing the technology. Now, unless Indian industries catch up, it will be extremely difficult to wean the people off this cultivated need.
Ideally, the US should be doing everything possible to collaborate with India on countering this threat. Under Donald Trump, however, it seems determined to end up a dinosaur that thinks its size matters against more agile and evolved adversaries.