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Misery Seeks Company – China Courts India to fight US Trade War

Misery Seeks Company – China Courts India to fight US Trade War

US sanctions against China seems to be having its intended effect. As pressure mounts, China’s change of stance is becoming more evident. According to recent reports President Trump and Chinese leader Xi Jinping are likely to meet at the G20 summit in Buenos Aires in November in an effort to work out a solution. But the meeting of the two leaders may not produce any dramatic resolution, given the tough stand of both the countries.

That the Chinese economy is bearing the brunt is in no doubt. Ford reported that its September sales in China fell 43% compared to same period last year. This comes in the midst of a big slump in Chinese auto sales. The IMF, for its part, has already signaled the slowdown of the Chinese economy and put its GDP growth estimates for 2019 at 6.2%. Despite all the bad news on the economic front, Chinese leadership continues to put up a brave face.

The US appears to have its strategy cut out. Vice President Pence, in a hard hitting speech at the Hudson Institute, unequivocally charged China with interfering in US elections and warned of consequences. In its 2018 National Defense Strategy paper, the US has clearly identified the two ‘revisionists powers – China and Russia’ as main threats.  The paper goes on to further recognize ‘China’s military modernization, influence operations, and predatory economics in its efforts to coerce neighboring countries to reorder the Indo-Pacific region to its advantage’ and perceives it as a long term threat to US interests.

The series of events leading up to the new set of tariffs on Chinese imports as well as the subsequent pronouncements should leave no room for doubt about US intentions. If anything, it is clear that the US will not stop with just the trade war. It is only part of an overarching strategy to contain Chinese influence globally.

China’s strategy, on the other hand, seems ambiguous and is banking on flat defiance of the US as a measure of projecting its power. It has unleashed a massive propaganda campaign, particularly in the US media, in a determined bid to win friends. Not surprisingly, many pundits have opined on how the trade war with China is unsustainable and could hurt the US too. But all this may not really alter the situation on the ground which is firmly in favor of the US

On the international scene, China has used its influence to marshal its friends and allies in an attempt to build a coalition to portray the US as the chief villain of the world. In this context, it is indeed interesting to see that China has reached out to India, pontificating on the requirements of ‘a stable environment that will facilitate the growth of the two key economies’. In its attempt to win India to its side in its trade war with the US, it has called for the two countries to join together to bring about a ‘more just and reasonable international order’.

China’s change in tone and tenor – evident in its statements and diplomatic outreach – is only symptomatic of the severe stress on its economy and political leadership. There are also indications of a lack of cohesion amongst its leadership in responding to the US.

Many in India recall the often rancid and undiplomatic statements emanating from its foreign office during the Dokhlam crisis. But the very same establishment has now unleashed the equivalent of a diplomatic charm offensive. This only highlights the fact that the country is up against the wall in its bid to untangle itself from the costly trade war.

But India is no China in every sense of the word. Its economy is a not as big, nor is it as lopsided and heavily dependent on exports to the US for its survival. Secondly and most importantly, India is a plural democracy in the truest sense of the term and is in no danger of a systemic collapse if and when sanctions are imposed.

It is worth pointing out here that following the Pokhran II nuclear explosions in 1998, many countries including China, Japan and Canada condemned India. China, for its part, was at the forefront, demanding international actions against India. But now that the tables have turned, China has suddenly discovered the virtues of ‘regional economic stability and growth’ by working together.

When the US did impose sanctions on India in May 1998 following Pokhran II, the country did not implode. The fact was that its citizens rallied together in support of the democratically elected government. But in China’s case, their leadership is acutely aware that prolonged sanctions could trigger internal unrest and rebellion that could easily threaten its structural integrity as a nation state.

Unlike China, India’s relationship with the US is on an entirely different footing. It has no overt or covert aspirations to unseat the US as the world’s superpower, nor does it have a confrontationist approach to it. But it is indeed true that, like China, India probably has a boat load of differences with the US, on issues ranging from trade to political and world view. But that is par for the course betwixt democracies.

But at the end of the day, despite the differences, the US and India, as history bears witness, have resorted to bilateral discussions to resolve these issues. Unlike China, there is no public record of India threatening or confronting the US.

Being an authoritarian set up, China lacks that fundamental connect with the US or India. At a time when it is in serious trouble with the US, it cannot pretend a have a comradery with India since the latter too is ‘impacted by Trump’s unpredictable trade policies’.

Definitely, China is expending its diplomatic resources in creating a mirage of a synergy with India out of a non-existent common cause.  The ground reality is that the leadership in India and the US are aware of the phoniness of this outreach by China.

In fact India must – and there is ample evidence to think it has – see the speciousness of this argument. It cannot join hands with China to make a common cause. India’s world view and priorities are different and dictated by New Delhi, not Beijing.

Misery loves company and China’s outreach to India is definitely a case in point.

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Posted by on October 15, 2018 in China, Donald Trump, Economics, Foreign Policy, Trade, US

 

Trade War – US Trumps China

Trade War – US Trumps China

As part of a worsening trade war, President Trump on Monday, September 17th, 2018 announced a slew of new tariffs on imports worth $200 billion from China. A 10% tariff will come into effect later this month which will then rise to 25% from January 2019. Not to be outdone, China too has responded with tariffs on $60 billion of US goods that includes meat, nuts, alcoholic drinks, chemicals, etc.

These announcements come in the midst of an already expanding trade and sanctions regime that has already engulfed the EU, Mexico, Canada, Iran and Turkey in its wake. But the response from most nations have been predictable. Fully understanding the potential threat to their vulnerable economies, Mexico and the EU quickly sued for peace.Canada too is in advanced negotiations to resolve outstanding issues. That leaves behind Iran and China in the crosswire.

This has sent shock waves in stock and currency markets all over the world. Many national currencies have tumbled, including India’s Rupee. But the collateral damage will be broader and deeper and continue to strike at the very root of “free trade” as we understand it today.

Several pundits have faulted Trump for his ‘aggression’ on China and have blamed him for what many see as the coming collapse of international trade. While one may disagree with the way Trump has executed the tariffs, he is absolutely right on taking on China. In fact the US has been very late in getting its act together on China.

A patient review of the events and facts may suggest the urgent need to hit the reset button on China. China is, by no means, a saint and has been violating every bilateral and multilateral agreement to further its trade. In fact many nations, particularly the smaller economies in the developing world have long complained of dumping of Chinese goods on their markets that led to the decimation of local businesses in these countries.

US too has long been wary of China stealing civilian as well as military intellectual property for several decades now. Further, China’s scant respect for international law – from its defiance of the International Court of Justice on the South China Sea judgement to coveting its neighbor’s land – is all well known.  If the international community has very little regard for China as a responsible world citizen, it has only itself to blame.

China may be believing it has arrived on the world stage as a super economy and a super power. That probably is the reason it decided to defy the US and impose counter tariffs. The ground reality, though, is that the US is still the largest economy with the most powerful military in the world.

Unlike China, the US has the power and means to impose sanctions and enforce it. The sanctions on Iran is a case in point where it has successfully prevented other nations from buying oil from it.

The Chinese on the other hand have a false sense of their international influence and authority. Their recalcitrance at the negotiating table earlier with the US has indeed surprised many. They seem to have played their hand wrong to their own detriment. The bottom line is that in the current trade war with the US, China will be alone as no other nation will openly defy the US to support them.

As regards the sustainability of the trade war, it is anybody’s guess as to how long this will last before a diplomatic resolution is negotiated. But given the asymmetry in trade – China exports over $200 billion compared to $80 billion of imports from the US – it is more vulnerable and will cave in sooner than later. China’s defiance is ill advised and amounts to a hara-kiri. Delay in arriving at a negotiated settlement will be a punishing setback for China and will undo decades of economic progress.

It must be mentioned here that international trade as we understand today is built on the twin pillars of economic pre-eminence and military might. These two pillars are then artfully packaged and deployed using sophisticated diplomacy to gain maximum commercial and economic advantage. Countries endowed with both emerge leaders and winners. That is the winning formula and all nations understand this very well. But for China to pretend it is on the same footing as the US is indeed churlish.

We must note here though, that history is a mute witness to the fact that when push comes to shove, the true intentions of nation states have emerged. The US and its allies have a track record of not hesitating to weaponize their trade relations and impose sanctions, which really is a proxy for their overwhelming military might, to ‘straighten’ things out.

Of course, this is not to suggest that the current crisis will transmogrify into open armed conflict. Far from it. But the consequences could be as devastating. However, in international relations, the dynamics and power equations keep changing depending upon the underlying economic fortunes of the country. The EU for example, given its weak fundamentals, may not be able to stand up to China. But the US, on the other hand, buoyed by a booming economy, has staying power.

For China, a prolonged face off with the US can have disastrous consequences at home. From unprecedented levels of unemployment to internal unrest and rebellion, anything in between may be a potential outcome.

The ongoing trade war between the US and its major trading partners has powerful lessons for India. India is caught between the US on one side and some of its own major trading partners – Russia, China and Iran – on the other. How India manages to successfully maneuver its way around these treacherous waters of international sanctions will determine – to a large extent- the survival and long term growth of India. But it certainly cannot adopt a confrontationist approach vis-a-vis the US. A collaborative approach will take it places, literally. Prime Minister Modi seems to be on the right track.

 
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Posted by on September 19, 2018 in China, Donald Trump, Economics, India, Trade

 

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US – CHINA TRADE WAR – Why Trump will Win

US – CHINA TRADE WAR  – Why Trump will Win

 The rising trade tensions between the US and its major trading partners, particularly China and European Union have been making news for some time now. It may be recalled that the US imposed tariff on imports of Chinese goods worth $200 billion and had also threatened to impose tariffs on cars imported from EU.

But the European Commission led by Jean-Claude Juncker quickly visited Washington DC and appears to have successfully negotiated and resolved the trade issues, at least for now. The EU plans to buy more US liquefied natural gas (LNG) and soybeans and has agreed to work with the US “toward zero tariffs, zero non-tariff barriers, and zero subsidies on non-auto industrial goods”. Trump seems to have won hands down in the trade frictions with the EU.

But the trade war with China, on the other hand, seems to be following a different course with no resolution in sight yet. China too had imposed retaliatory sanctions on goods imported from the US. The US has further accused China of manipulating its currency and is now considering additional tariffs on goods worth $500 billion.

The consequences of this internecine tension could be severe and reverberate throughout the world. The IMF has warned that the current trade war could slow down world economic growth by 0.5% or cost the world $430 billion by 2020.  In its World Economic Outlook Update published in July 2018 IMF has warned that the global expansion that was witnessed over the last two years has plateaued and has become less balanced. It projects global growth to stay at 3.9% over the next two years. Translation – any trade tensions, particularly among key economies at this juncture may be injurious to all.

While the specter of a full blown trade war is never benign, a close examination of US-China trade data that is publicly available, courtesy US Dept. of Commerce, Census Bureau is indeed revealing. Data for the last eight years (i.e. 2010 through 2018 May) shows US exports to China has been   consistent at just over a US$100 billion. On the other hand, imports from China have steadily grown from US$ 365 billion in 2010 to US$505 billion in 2017. Imports for 2018 will probably be at the same level as 2017.  Please see chart.US China Data1

US imports are almost four times its exports to China thus giving rise to a yawning trade deficit that is undesirable for any county, and most certainly for the US. But President Trump, by imposing high tariffs, may have converted this liability into a powerful weapon. Given its four to one advantage, China is four times more vulnerable, in dollar terms, than the US. The current impact of Chinese tariffs on US farm sector has been stemmed by a $12 billion federal subsidy announced by the department of agriculture.  Hence, any retaliation – both current and proposed – from China will have minimal effect on the US. Trump seems to have the upper hand with China.

One of the key reasons for the imposition of additional tariffs on China – at least the stated objective of Trump – was bringing jobs, particularly manufacturing jobs, back to the US. On this count, however, Trump may have miscalculated. America must wake up to the reality that manufacturing jobs that were squirreled away to China over the decades will never come back.

The fact is that the US is a high cost economy and the final landed cost of manufacture is very high. Secondly the strong US dollar does not help either. Bringing back manufacturing jobs will only price its products out in a fiercely competitive export market. Most manufacturers may not take the bait.

The US government fully understands this. Consequently, over the decades, it has successfully encouraged the migration of the economy to a trade and economic culture that is largely dependent and sustained by innovations and cutting edge technologies. This has helped in the creation of new markets and orient them to where the US will continue to enjoy obvious advantages and hence dominate.

China too understands the nuances of this game and has been in an extraordinary hurry to acquire new technologies at any cost. Hence it is no surprise that China has been consistently accused, over the decades, of industrial espionage and theft of intellectual property (IP) by many countries including the US. It is no surprise that under the given circumstances, President Trump was left with limited options in dealing with an aggressive trading partner like China.

China has not played a good citizen of the world. At every opportunity, it has seized its neighbor’s land in its infamous ‘salami slicing’ strategy to fulfil its expansionists ideology. It has shown no respect for international law – be it the annexation of Tibet or in the blatant militarization of the Spratly Islands in South China Sea, despite the International Court of Justice (ICJ) verdict against it.

If today China has a negative residue of international goodwill, it has only itself to blame. Its emergence as a big economy and world player has not been peaceful.

The fact that China has used the BRICS forum to speak out for “free trade” only underscores its desperation. Further, recent reports have indicated that behind its brave façade of resisting US tariffs, China is deeply worried about the potential for many of its companies to file for bankruptcies.

It is indeed impossible to guess as to what is on President Trump’s mind in dealing with China. Is he playing hard ball to get China to the negotiating table for a better trade deal? Or is the US planning to bring China on its knees without firing a shot, given China’s flagrant violation of international law in the South China Sea? Or is it Trump’s larger game plan to cut unfriendly nations to size, given his recent experience in winning over North Korea without firing a shot.

Whichever way you look at it, China seems to be the obvious loser. It is only a matter of time before China will get to the negotiating table to work out a “reasonable agreement” very much in line with the EU example. Before long, normal trade will resume, albeit under circumstances that are lot more favorable to the US.

 
 

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Cambridge Analytica Scandal – Is Data Privacy A Mirage?

Cambridge Analytica Scandal – Is Data Privacy A Mirage?

The unauthorized “harvesting” of personal data of over fifty million Facebook users by Cambridge Analytica is the latest in a continuing saga of data related scandals. Breaking his long silence, Zuckerberg apologized to his billion plus users worldwide and called it a “breach of trust” and vowed to take steps to protect user data. But the damage has been done.

As many averred, Zuckerberg’s apology inherently assumes Facebook users will continue to trust it and that all will be forgiven and it will be business as usual. That may well turn out to be true. But given the seriousness of this “breach of trust”, this may have serious consequences on its fortunes. One immediate fallout is the #DeleteFacebook campaign that quickly went viral. Also Facebook stock lost almost 9% in value.

Facebook’s supreme success rests on a business model built on profiting from customer data and its priceless derivative – customer insights. Notwithstanding Zuckerberg’s apology and promises to clean up, it is anybody guess if he will really follow up or implement only cosmetic changes.

This brings into focus the importance of consumer data in today’s data driven economy. It is common knowledge that vast amounts of data are being generated every day, particularly by social media users. Using sophisticated analytics, this data can be mined to yield powerful insights about users. In fact it is a common practice for marketing companies to use these insights to create a full behavioral personality profile or characteristics of an individual.

Products and service or even a political ideology could then be effectively tailored or custom fitted for that profile in what is called micro targeting. This data driven super customization has wide applications – in retail marketing, business espionage, political campaigns etc. It is for this reason that today data is seen as the most important resource and companies would do anything to get their hands on it.

Given the multiple use of this cutting edge knowledge resource born out of the confluence of technology and high end quantitative skills, it is indeed awing and worrisome at once. It is like a knife that can be used in the kitchen as well as to kill. The exploits of companies like Cambridge Analytica have justifiably caused disquiet among large sections of society.

Cambridge Analytica, like many other companies, are way ahead of the curve in using these precious insights in seeking to “change audience behavior”, or to generate  favorable outcomes in the targeted populations in a general election. Hence their popularity with political parties worldwide, including India.

As can be seen, there is nothing illegal per se in Cambridge Analytica’s business model. In fact all major corporations worldwide are engaged in exploiting data in one form or other for their bread and butter. But the illegal gathering of profile information of millions of users without their express consent is what is under scrutiny.

But what has been a rude wake up call for many is the fact that companies like Cambridge Analytica can potentially disrupt a democratic process like an election. Undercover videos shared by Britain’s Channel 4 News show how the company actively planted news – typically fake news in the “bloodstream of the internet and let it grow” to achieve desired social and electoral outcomes.

This it very much akin to what the Soviet Union was doing decades ago to brainwash its people. The distinctions between legal and illegal is often blurry and Cambridge Analytica and its ilk appear to have exploited it to the hilt. To confound the issue, in many countries, regulators have still not woken up to combat this malefic use of data.

The problem is indeed acute in countries like India where political parties have shrewdly worked off radar to use the services of Cambridge Analytica and its subsidiaries to “influence social behavior” in the election process. How far the election processes have been subverted is anybody’s guess. But it is equally futile to point fingers at the Congress party or the BJP since all of them have at some point in time used these services.  It is like the Democrats in the US blaming the Republicans because the Trump campaign used them in 2016. But it came back on the Democrats when it was revealed that they too – the Obama campaign in 2012 -had extensively used these services.

The scary part here is that the users whose data is being fought over, have practically no say in the matter because they have already shared their private information on the internet. It has left their hands and there is no way they can get it back. How this will be used and shared or who will use this is being decided by companies like Facebook who are primarily motivated by profits and not overly concerned about user privacy. That such breaches and data hacks occur regularly speak volumes of the gap between current laws and their rigorous enforcement.

And this will definitely not be the last of data breaches or breaches of trust. But the real problem is that we are confronted by an insurmountable issue here that threatens individual liberty and the inalienable right to lead a private, yet social life.

In the end, these social engineers who stole personal information of millions of unsuspecting users in reality turned out to be deadly data terrorists who deployed their stolen assets to disrupt cherished democratic processes and skewed election outcomes in so many countries at the bidding of their paymasters.

The bitter truth is that we live in a world where nothing is private.  Google, Facebook, Twitter, Amazon and any number of known and lesser known companies already know more about us than we can imagine. We have to reconcile ourselves to the fact that, however unpalatable it may be, data privacy is just a mirage.

The need for agile, yet draconian laws on data usage together with forensic monitoring of disposal of data has been repeatedly pointed out by experts in the field. Hopefully, the wait may not be long. Social media companies have long taken the naïve user for a ride. It is time they stepped off the roller coaster.

 

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Anything but fire and fury

Anything but fire and fury

The State of the Union address on 30th January 2018 by President Donald Trump was welcomed by many as a great speech in which he highlighted the achievements of his first year in office. In his speech, Trump called for unity among law makers and urged them to rise above party lines – something which went well with the American public. One would have thought that this would signal an end to political flame throwing which has so far unsettled the administration and kept it on the defensive in a perpetual firefighting mode.

Apparently not so. The book – “Fire and Fury – Inside the Trump White House” by Michael Wolff that came out in early January of this year – has been the latest in a string of distractions for the administration. It has been a hot favorite of major television channels, social media and chatterati. The author has definitely capitalized on the wide publicity on prime-time national television and made it to best seller lists.

Some background on this book will definitely not be out of place.  Firstly, the book is well written and offers an excellent read for the discerning reader. Michael Wolff, the author, has spent a lot of time in cherry picking anecdotes and weaving them into colorful fabric to showcase to the world what he calls “the insider’s view of the Donald Trump White House”.

Michael Wolff seems to be convinced that Trump does not deserve to be the President. He is at loggerheads with Trump’s well-known penchant for undying loyalty from his team and highlights this to underscore his unsuitability for the high office. The detailed depiction of the President, his idiosyncrasies, his disbelief at being elected and the purported disdain of his close advisers may all be true. Regardless, the fact remains that, much to the disdain of media pundits and Beltway lobbyists, it is the American people who fairly and squarely elected Donald Trump and put him in office.

Wolff all along gives the impression that he had unfettered access to the White House. But former Press Secretary Dana Perino and others in the know have asserted that it is impossible for someone to be hanging around in the West Wing of the White House even with proper authorization.

The book contains much of what can be adduced as rumors, unsubstantiated anecdotes and water cooler gossips that seemed to play into the agenda of Trump’s political foes. The glaring inaccuracies, insinuations and innuendos expose the true intentions of the author.

Wolff asserts that the 25th amendment was an issue that was constantly on the mind of the White House. The 25th amendment to the US constitution provides for removal and succession to the office of the US President and Vice President in the event of death or disability of the incumbent. But Wolff admitted on national television (CBS This Morning show) that he never met anyone in the cabinet or the Vice President Mike Pence. If he did not meet or interview any of them nor was he allowed into any of the meetings of the senior leadership of the administration, how could Wolff tell that the issue was on their minds?  No wonder Wolff’s credibility has plunged.

Wolff’s reference to the purported endless discussions on the 25th amendment fueled the media narrative that portrays Trump as mentally unsound and hence unable to discharge his duties as the President. In fact, on the sets of MSNBC’s “Morning Joe”, co-host Mika Brzezinski bluntly declared that she agreed with a North Korean official’s assessment that President Donald Trump is “mentally ill.”

Throughout the book, the discerning reader cannot miss Wolff’s angst and obvious inability to come to terms with the reality of Donald Trump in the highest office. The author does little to screen the obvious impression that he is an obsessive dirt rat on a mission to dig out half-truths, peddle distortions and blatant factual inaccuracies. Many pundits have expressed the view that Michael Wolff in many ways echoes the deepest disappointments of the Hillary campaign and hence it was no surprise that he became the instant darling of the liberal media.

The delectable presentation of anecdotes that appear to be no more than off-the-cuff remarks by administration insiders in unguarded moments or at the height of frustration must not be mistaken as fair impressions of a sincere author that went awry. It boils down to the work of art of someone who, in the words of Democrat Steve Rattner, the former head of President Obama’s Auto Task Force, “turned out to be an unprincipled writer of fiction”.

But what has rankled many are the outrageous insinuations that Trump and Nikki Haley, the US Ambassador to the UN, were having an affair. Wolff gives no details or proof, except that the two were in private meetings. Even the liberal media which was using Wolff to take potshots at Trump, suddenly dropped him like hot potato. Mika Brzezinski abruptly ended her show with Wolf when he struggled to defend his innuendos at Ambassador Nikki Haley.

By his own admission Wolff used his proximity to Steve Bannon to open doors to the White House. Much of his writings appears to be a view of the West Wing of the White House through the eyes of Bannon. It is no surprise that in hindsight, Bannon had to leave.

But herein lies an enormous threat to the integrity of the highest office as well as the inner circle of power of the ruling dispensation from seemingly innocent book writers. Senior administration officials have exposed their lack of experience in putting in place the right checks and balances in clearing people like Michael Wolff. To that extent this episode is a costly learning process for the Trump administration. The White House must acknowledge its lapses and quickly revamp the process of providing access the highest office.

Michael Wolff’s Fire and Fury too has had its two minutes of fame on national television and is now well on its way to being forgotten. The book has proved to be anything but fire and fury.

 

 

 
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Posted by on February 4, 2018 in Donald Trump, Hillary Clinton, Media, Press, US

 

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Destabilizing America From Within

Trump_Press1President Trump’s first five months in office have truly been action packed.  Many of his new team members have been let go or have resigned on their own. This comes on top of the delayed confirmations of many of the President’s picks. Not to forget the series of street protests, arson and other expressions of anger and opposition to the incumbent president. All this, as Trump himself has pointed out, have been a road block for the administration to even get settled in office. But as these fester, they are taking on a new avatar that could tip the scales and severely scar America – by dividing its people and deepening the chasm in its polity.

There have been almost continuous protest rallies after the results of the elections were announced, often resulting in arson and violence across country. These protests have been no impromptu gatherings, but well planned, funded and executed with political backing. For instance, social media have been afire with pictures of protesters being brought in to locations in charted buses. Needless to say, that while the protests themselves are an unalienable right in a democracy, it now appears in hindsight that there is elaborate machinery supporting all this. The strategy of the detractors seems to be to keep the flame of dissent alive and keep the administration in a perpetual firefighting mode and thus deny any room to settle down for governance. This is really disconcerting.

In all this, the press and media too seem to have been at their divisive best. The diverse spin from the cable channels often buries the news and the bitter tirades leave the viewers confused and disgusted. Any neutral American can see that the media is definitely driven firmly by its agenda to oppose the Trump administration on anything and everything. The spike in unnamed sources and publication of what appears to be a running stream of sensitive intelligence leaks by established media leaders has only befuddled the average American viewer. That none of these allegations have been proved has only added to the divisiveness.

The leaking of photo evidence in the recent Manchester blast case in the UK is the latest in intelligence leaks. This has strained US-UK relations and an infuriated Prime Minister Theresa May had to complain to President Trump. It appears that the antagonists of the administration would stop at nothing – even irking a close ally – in trying to get at President Trump. Americans now seem to believe in social media more than the cable networks. The networks, who themselves have been the casualty for their actions as viewership and readership have tanked across the board, appear to be in no mood to relent.

The media and press in a democracy undoubtedly have a very important role to play. They are the watchdogs that are first line of defense against an errant administration. But to constantly quote unnamed and unverified sources to support their allegations has only eroded the credibility of a key institution of democracy.  Agreed, we have to live with this in a plural democracy. But the scale and level of acrimony that this has generated is unbelievable and has only deepened the divide.

The Democrats – judging from statements issued by Senator Hillary Clinton as well as Senate and House representatives – have obviously not yet gotten over the electoral defeat. In fact, John Lewis, a Democratic Congressman from Georgia has called Trump an illegitimate President on multiple occasions on television. This is indeed a shocking commentary of the political leaders in a mature democracy, and indeed the leader of the free world, behaving like scorned brats after losing an election.  All this speaks of the new low in current politics.

Most Americans, irrespective of party affiliations, in the best democratic traditions of the country have accepted the election results and have already moved on and are disgusted by the continuous attempts deepen the divide. Efforts to keep the acrimony alive are clearly doing the biggest disservice to the US. The Democrats, media, and sections of the Republican party, on the other hand, seem to be stuck in a time warp and are perilously insulated from public opinion.

These internal dissensions are bound to impact the international credibility and standing of the US. German Chancellor Angela Merkel has just sounded the bugle of mutiny of sorts against the US when she called on Europe to not count on the US and UK for their protection. These are unprecedented statements from allies that many would not have even contemplated would ever be happening against the US. This is because the US is now being perceived by friends and foes alike, as a house divided and hence a weak power.

In a democracy, diverse views and debates are essential for liberty and freedom.  But using these established democratic traditions as a clever tool to divide the people and embarrass a new administration in office is unacceptable. The Trump administration by no means deserves any undue favors from the watchdogs of a free society or in the court of public opinion. But it has a rightful claim to its legitimate space and duty to fulfill and execute the mandate of the people.

The efforts to sustain anti-Trump protests and put multiple roadblocks for the administration has reached a scale and magnitude that many fear can tip the balance towards instability. Donald Trump won the election fair and square and the Democrats lost. They need to accept the verdict of the American people. They will have their say and opportunity in 2020, but till then they need to let Trump govern.

The risk for America is too great and if the country trips, only chaos and ignominy will visit the US. Most Americans understand this. America and its people have moved on and expect the political establishment to close ranks and put a better show – for the sake of the country.   America has to get past the angst of electoral reverses and deal with some real issues – economic recovery, healthcare legislations and other policy issues that will determine the well being of its people in the coming years. The protagonists and antagonists need to back down and do their bid to reduce the rancor and provide constructive criticism and help Trump govern. America, urgently needs to heal now. A large dose of healing is what is called for.

 

Trump’s Economic Diplomacy – A Pundit’s view

As President elect Donald Trump and incumbent President Obama work out details of a smooth transition, Americans and the world at large will keenly follow how the incoming administration takes shape and influences their lives.

Many chaltrump_obamalenges await the new administration. Hot button issues on the domestic front will undoubtedly dominate Trump’s attention. As he assembles a top talent team, Trump has promised economic revival as his top priority with immediate focus on Tax reforms, Infrastructure, Healthcare and Immigration. If he can pull this off, it will be unprecedented and generate millions of jobs for middle America.

As part of this quest, the new administration will certainly reassess US participation in economic and trade agreements. It will seek to renegotiate or redraw these agreements to promote American jobs. Most likely, the Transpacific Trade Partnership (TPP) will be replaced by a new trade agreement.

The Trump administration’s heavy economic agenda will likely be reflected in its foreign policy initiatives also. Economic Diplomacy will dominate while erstwhile interventionist doctrine may take a back seat, if not abandoned altogether. This could mean that US may scale down its involvement from conflict zones and other problematic areas of the world. This new diplomatic doctrine will put the spotlight on four areas – Europe, Russia, China and India.

Relationship with Europe will require a lot of sustained and energetic work. It is no secret that many European leaders have been skeptical of Trump. Their reactions to Trump’s election have ranged from nervous to outright undiplomatic. For example, the French ambassador to US raised eyebrows with his ‘undiplomatic tweets’ that he is reported to have subsequently deleted. German Chancellor Merkel’s response to Trump election was terse and calibrated. These reactions have publicly exposed the underlying discomfort among European allies.

Traditionally, the US has almost had a mystical influence on Europe. Despite differences, mostly bilateral, Europe identified itself with the US as an extension of itself. At least till Trump came on the scene. Trump had been critical of Germany’s intake of Syrian refugees during his campaign. He had also wanted the allies to contribute their fair share for the maintenance of NATO. Trump’s bluntness and his trademark lack of political correctness has soured relations.

It must be mentioned here that much of this disquiet among leaders about Trump has spawned from the fact that they tend to see and read Trump literally – word for word. They see his political incorrectness, but miss the larger message, often relying on an image portrayed by the media to understand him. But the media too, as seen in the election cycle, is guilty of misreading and missing Trump larger message. The sooner Europe gets past this mindset, the sooner will Trump reach out to them.

But the fact is that an economically weakened Europe needs the US for recovery. In return the US too needs Europe’s support in establishing Western might across the globe. This mutual dependence and a long history of partnership will endure and continue to sustain the relationship, albeit with creases that can be ironed out. But that should not dismiss the angst in Europe as the incoming administration works with individual European allies and the EU. However, with his native shrewdness and ability to strike deals, it may not be long before Trump and the allies are back to business as usual.

The North Atlantic Treaty Alliance (NATO) has been predicated on a communist threat from Soviet Union. But after the collapse of the Soviet Union, many strategic analyst have rightly questioned the need for NATO. Trump may be right in questioning the huge cost of maintaining the alliance, given that there are more pressing economic issues at home. But any rethinking on NATO only opens a host of other issues that may not be resolved easily or quickly. That may tie down Trump’s hands on any decision on NATO.

Trump will take a fresh look at relations with Russia. During his campaign, he had mentioned that he was open to improving relations with Putin. There is confluence of interest, at least in eliminating ISIS from Syria. But if Trump reaches out to Russian and succeeds in building new bridges with Putin, there may be early resolution to conflict in Syria. This may also impact east Europe and reduce tensions there. This will be important from EU’s perspective. Any reduction in tension with Russia will also spur trade and that is something an economically bruised Europe is looking forward to. But the cold war era warriors and policy wonks in Washington may not easily come around to reaching an understanding with Russia and hence the problem is likely to fester.

US relations with China may not see any significant change. Even though Trump has talked about China stealing American jobs, no precipitate action may be forthcoming. In fact, Trump’s deal making skills will be helpful in negotiating better trade deals with China. How far he can bring backs jobs from China to USA will be moot question. The US is a high cost center and manufacturing will be expensive, even if tax concessions are offered. On the other hand, China will maintain its currency advantage and enjoy lower costs of production. This will be a real challenge for the Trump administration.

India offers a lot of opportunities for the new administration. Indian Prime Minister has already reached out to Trump and congratulated him. President elect Trump has openly expressed his admiration for Modi. But beyond diplomatic niceties, India has a lot of work to do to step up the relationship with the US. India’s initiative to boost manufacturing under ‘make in India’ initiative and Trump’s focus to bring back jobs to the US may appear to be at loggerheads. But the reality is that there is significant room to maneuver a mutually win-win trade deal. For instance, while India can buy US arms, frigates, aircrafts etc., it can also be a huge market for green technologies – solar energy, digital smart city technologies, desalination technologies, waste disposal industries just to name a few.

Also huge opportunities lie in deepening a regional strategic cooperation that is already in its infancy. For example, Trump and Modi could inject new vigor to the ‘Pivot to Asia’ strategy that could have long term impact for US as well as regional stability in Asia.

 
 
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