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If Donald Trump becomes US President, India may gain at China's expense. Here's why
22 May, 2016, 06.57AM IST
By William H Avery
The India-US relationship is stuck in a rut. A rut of worn-out bilateral bromides: "strategic partnership", "largest democracies" and "people-to-people exchanges". There is nothing wrong with such talk. But let us be honest: these are the sort of things diplomats work on when they are out of other ideas. The US presidential election in November now seems certain to pit Donald Trump against Hillary Clinton .
The India-US relationship is stuck in a rut. A rut of worn-out bilateral bromides: “strategic partnership”, “largest democracies” and “people-to-people exchanges”.
Clinton is a known quantity to Indian government officials: First Lady for eight years, US senator for another eight, then secretary of state for four. All the while she has been a friend of India. If elected president, she will work the bilateral relationship competently, but she will work it within the rut. What might a Trump presidency look like for India-US relations? Most of what Trump has said about India, and about its neighbours, suggests that he would lift the Indo-US relationship out of its rut. In doing so, he could well take a good bilateral relationship and make it, as he himself would say, amazing.
Indians might well ask, how can we expect an amazing relationship from a candidate who mimicked an Indian call centre worker in one of his campaign speeches? From a candidate who rails against outsourcing, and vows to right trade imbalances of the sort that India currently enjoys with the US?
China's Loss If Trump wins in November, it will be because he will have, in turn, disrupted the Presidential Primary System (through a hostile takeover of the Republican Party) and the general election map (by wresting Rust Belt states from the electoral grip of the Democratic Party). As president, he could well disrupt the balance of power in Asia, shifting it in favour of India.
China and Pakistan have been using the US as a cash cow for decades: China by running a huge trade surplus ($366 billion in 2015); Pakistan by playing a double game, soaking up US aid (more than $30 billion since 2002), while pretending to fight radical Islam. All signs indicate that Trump, if elected, would cut down on the flow of cash to both countries. The US has lost five million manufacturing jobs over the past 15 years, while China has seen rapid growth in its manufacturing sector over the same period. A President Trump will be electorally committed to bringing a material number of lost manufacturing jobs back to the US; the only way he can do so will be to offset Asia's (especially China's) labour cost advantage in manufacturing with a combination of tariff and non-tariff barriers.
Such a move, in, say, early 2017, would come at the worst possible time for China, when a decades-long credit-fuelled investment boom may finally be turning to bust. For China, the potential outcomes of a trade war with the US range from sharply slower growth (best case scenario) to outright recession, which in turn could spark political unrest and, in a worst case scenario, revolution. Would India lose some technology and outsourcing jobs if a Trump Administration abandons US free trade policies? Perhaps, though it is harder to slap a tariff on a piece of code coming over the internet from Hyderabad than on a piece of machinery coming over the ocean from Shanghai. Regardless, in the zerosum great game of Asian powers, China's loss is India's gain. And China stands to lose big under a President Trump.
Check on Pakistan Pakistan, India's other troublesome neighbour, is also set to be a big loser in a post election shake-up of US relations in Asia. Trump has called Pakistan "probably the most dangerous [country]" and has said that "you have to get India involved; India is the check to Pakistan... I would start talking at that level very very quickly". This statement is a sharp reversal of tone from presidential candidates toward India-Pakistan relationship. Just eight years ago presidential candidate Barack Obama was hinting at the US mediating in Kashmir.
Since then, as president, he has avoided talk of mediation and stuck to the long-standing Washington script of simply encouraging the two sides to "improve their bilateral relations". Now, however, the man who could be Obama's successor is tossing out that script and saying, in effect, Pakistan is a problem, and India is part of the solution to that problem: a profound humiliation for Islamabad.
A President Trump would be more likely than any of his recent predecessors to try to influence Pakistan's policy by threatening to cut off US aid. Trump implied as much when commenting on the case of Dr Shakil Afridi, who infuriated Pakistan's government for allegedly helping the CIA definitively locate Osama bin Laden in 2011; Afridi has languished in a Pakistan jail ever since. "I think I would get him out in two minutes. I would tell them, 'let him out' and I'm sure they'd let him out, because we give a lot of aid to Pakistan," said Trump.
London bookmakers have the odds of Trump winning in November at 5 to 2, shortened from 6 to 1 just over a month ago. The prospect of a Trump Presidency is certain be to rattling nerves among the generals of Rawalpindi and the Communist Party leaders of Beijing.
For the same reasons, it should have the inhabitants of South Block grinning with anticipation.
(The writer is a former US diplomat)
http://economictimes.indiatimes.com...as-expense-heres-why/articleshow/52380459.cms
22 May, 2016, 06.57AM IST
By William H Avery
The India-US relationship is stuck in a rut. A rut of worn-out bilateral bromides: "strategic partnership", "largest democracies" and "people-to-people exchanges". There is nothing wrong with such talk. But let us be honest: these are the sort of things diplomats work on when they are out of other ideas. The US presidential election in November now seems certain to pit Donald Trump against Hillary Clinton .
The India-US relationship is stuck in a rut. A rut of worn-out bilateral bromides: “strategic partnership”, “largest democracies” and “people-to-people exchanges”.
Clinton is a known quantity to Indian government officials: First Lady for eight years, US senator for another eight, then secretary of state for four. All the while she has been a friend of India. If elected president, she will work the bilateral relationship competently, but she will work it within the rut. What might a Trump presidency look like for India-US relations? Most of what Trump has said about India, and about its neighbours, suggests that he would lift the Indo-US relationship out of its rut. In doing so, he could well take a good bilateral relationship and make it, as he himself would say, amazing.
Indians might well ask, how can we expect an amazing relationship from a candidate who mimicked an Indian call centre worker in one of his campaign speeches? From a candidate who rails against outsourcing, and vows to right trade imbalances of the sort that India currently enjoys with the US?
China's Loss If Trump wins in November, it will be because he will have, in turn, disrupted the Presidential Primary System (through a hostile takeover of the Republican Party) and the general election map (by wresting Rust Belt states from the electoral grip of the Democratic Party). As president, he could well disrupt the balance of power in Asia, shifting it in favour of India.
China and Pakistan have been using the US as a cash cow for decades: China by running a huge trade surplus ($366 billion in 2015); Pakistan by playing a double game, soaking up US aid (more than $30 billion since 2002), while pretending to fight radical Islam. All signs indicate that Trump, if elected, would cut down on the flow of cash to both countries. The US has lost five million manufacturing jobs over the past 15 years, while China has seen rapid growth in its manufacturing sector over the same period. A President Trump will be electorally committed to bringing a material number of lost manufacturing jobs back to the US; the only way he can do so will be to offset Asia's (especially China's) labour cost advantage in manufacturing with a combination of tariff and non-tariff barriers.
Such a move, in, say, early 2017, would come at the worst possible time for China, when a decades-long credit-fuelled investment boom may finally be turning to bust. For China, the potential outcomes of a trade war with the US range from sharply slower growth (best case scenario) to outright recession, which in turn could spark political unrest and, in a worst case scenario, revolution. Would India lose some technology and outsourcing jobs if a Trump Administration abandons US free trade policies? Perhaps, though it is harder to slap a tariff on a piece of code coming over the internet from Hyderabad than on a piece of machinery coming over the ocean from Shanghai. Regardless, in the zerosum great game of Asian powers, China's loss is India's gain. And China stands to lose big under a President Trump.
Check on Pakistan Pakistan, India's other troublesome neighbour, is also set to be a big loser in a post election shake-up of US relations in Asia. Trump has called Pakistan "probably the most dangerous [country]" and has said that "you have to get India involved; India is the check to Pakistan... I would start talking at that level very very quickly". This statement is a sharp reversal of tone from presidential candidates toward India-Pakistan relationship. Just eight years ago presidential candidate Barack Obama was hinting at the US mediating in Kashmir.
Since then, as president, he has avoided talk of mediation and stuck to the long-standing Washington script of simply encouraging the two sides to "improve their bilateral relations". Now, however, the man who could be Obama's successor is tossing out that script and saying, in effect, Pakistan is a problem, and India is part of the solution to that problem: a profound humiliation for Islamabad.
A President Trump would be more likely than any of his recent predecessors to try to influence Pakistan's policy by threatening to cut off US aid. Trump implied as much when commenting on the case of Dr Shakil Afridi, who infuriated Pakistan's government for allegedly helping the CIA definitively locate Osama bin Laden in 2011; Afridi has languished in a Pakistan jail ever since. "I think I would get him out in two minutes. I would tell them, 'let him out' and I'm sure they'd let him out, because we give a lot of aid to Pakistan," said Trump.
London bookmakers have the odds of Trump winning in November at 5 to 2, shortened from 6 to 1 just over a month ago. The prospect of a Trump Presidency is certain be to rattling nerves among the generals of Rawalpindi and the Communist Party leaders of Beijing.
For the same reasons, it should have the inhabitants of South Block grinning with anticipation.
(The writer is a former US diplomat)
http://economictimes.indiatimes.com...as-expense-heres-why/articleshow/52380459.cms
If they could have done something, they would have done it already. People have been talking about the trade deficit for decades now, the second they genuinely think it's a bad deal they will cut the trade off.
