Trump’s trade wars have rewritten powerplay, but India didn’t get the memo

This world is being restructured and redrawn by one man, and what’s his power? It’s not his formidable military. It’s trade. With China, it turned on him.

Illustration by Shruti Naithani/ThePrint

It’s still night time in America as I write this and we don’t know what Truth Social posts we’ll see in the morning, or what new geopolitical shift they might signal. But we are beginning to get some clarity on his method now.

Three days back, as Trump was setting out for his three-nation Asia tour, he put out a shockingly disjointed and dangerous post. He said I’m asking for nuclear testing to be resumed so that the US is at the same level as China and Russia. And then ranted and rambled along.

Nuclear testing doesn’t scare anybody. Russia and China have much uranium to spare. This, therefore, wasn’t going to set off a new nuclear arms race.

The dangerous part was how a man so powerful could sound so unhinged. I know there’s a Trump fan club out there. See how Xi Jinping flattered him, President of peace etc. The world has to see some genius in whatever Trump says. It was said, ‘Oh, he was trying to soften the Chinese with that post.’ But the Chinese are not going to be scared by nuclear tests. It was more like he knew that he was going to capitulate, which he did.

This world is being restructured and redrawn by one man. What’s his power? It’s not his formidable military. It’s trade. With China, it turned on him.

Trump has understood, paradoxically, the power of being the largest importer from much of the world. If China is an exporting superpower, America is an importing one. Trump has turned a liability into an asset. If China, Japan, South Korea, Vietnam are all exporting powers, who do they get their surpluses from? You can add India. Trump is saying I know how important these surpluses are for you. I have the importer’s leverage.

His 30 trillion-dollar economy being the largest trade deficit holder against all major countries is power in the Trump world. Remember, he credits trade also for his claims of bringing about an India-Pakistan truce.

Then why was that nuclear test post disjointed? It’s because he figured that he was being jujitsu-ed by China. Because in this equation, the Chinese have a seller’s power, as also a buyer’s power. As sellers, they own the critical minerals. As buyers, they’re the biggest consumers of American soybean and corn. The Chinese knew, and Trump knew he couldn’t risk tariffing them punitively. That’s why the quick capitulation, proclamation of G2 as he boarded Air Force One for Kuala Lumpur.

That is something we in India refuse to understand. Our overall trade is relatively still so small we have too little of this new strategic currency. We sell America nothing that it can’t do without except generic pharma that Trump has exempted. But we are afraid to even exercise the significant buying power we could have had. China has lessons for us. You might wonder what’s the buying power of the Chinese if they are carrying a trade surplus of about $300 billion with America.

China rears about a half of the world’s pigs. It has a pork- and tofu-eating population of 1.4 billion. It consumes and imports enormous quantities of soybean. Those pigs have to be fed. Soybean is the protein in that feed, and corn the calories.

America is the largest grower of corn, and among the largest growers of soybean. Farmers, only 1 percent of America’s population, are a very powerful constituency. Watch Trump’s celebratory posts after his soybean deal, asking his farmers to buy more land, bigger tractors and declaring it the golden age of farming.

Xi just indicated he had options to get his agricultural commodities from other countries. Trump keeled over. And while in India our debates remain frozen in the mid-20th century, and our appreciation of science in the 19th, unfortunately, the Chinese have no problem buying soybean from anywhere, GM or not.

The Chinese are very progressive. Four years ago, they began GM soybean sowing and the area is expanding every year. Chinese cotton yields at this point are four times our own. Our yields have declined because our seed biotech was frozen in 2008. That’s a tragic story for another day.

The Chinese have shown you what you can do if you have the seller’s power and if you have the buyer’s power. All the other countries without this power are facing a humiliating and extractive trading hegemon.

Mexico was able to make a kind of peace with America simply because they started buying enormous amounts of corn from across the border. We blew our opportunity of giving Trump a little leverage by offering to buy some of his soybeans. We import more than $18 billion worth of edible oils every year. A lot of it is soybean oil. We also need cattle feed. Even if we did not want our cattle to eat this soybean. We could have simply exported it after extracting the oil. The same could have been done with corn and ethanol. We routinely import both soybean and corn. But no, domestic lobbies, particularly on the Swadeshi side, couldn’t be annoyed. This, when Modi government’s position on GM seeds is positive and nuanced as stated in its affidavit supporting field trials for home-developed GM mustard.

This is one area where superpower relationships can be determined simply on the basis of whether you buy my corn or not. Indian poultry industry is crying because corn has become so expensive. They are short of feed. If only we had offered to buy a couple of billion dollars’ worth of American soybean and corn, the two pain products for Trump which we import anyway. But no, we somehow think the world owes us much and we need to give nothing in return.

That era is now over. Trump has no respect for your reputation, history, and least of all politics. He showed it in breathtaking condescension by saying he isn’t pushing Modi too much (on trade and Russian oil) because I do not want to destroy his political career. He laughs at any talk of moral authority. He only knows hard power. And he’s told you what the currency of hard power is now. Trump wants to see what you have on the table and what it is that you can do for him.

The next thing we need to learn from the Chinese is the old Deng dictum: Bide your time, hide your power. The breathless celebration of being the fourth-largest economy on the way to becoming the third isn’t helping India’s cause. The big powers only snigger. It’s time for some humility and focus. This changed geopolitics has also ushered in a 1991 moment in India. If the challenge then was a balance of payments crisis, now it is the price India will pay for not dumping trade protectionism.

This will be a reform, if under compulsion, as it was in 1991. That’s why Commerce Minister Piyush Goyal has been asking entrepreneurs to smarten up, not keep asking for tariff protection. Indian bureaucracy can drag anyone along for years. The use-by date on that is over. For removal of doubts, read Trump’s posts before and after his Asia tour.