India can’t dodge Trump trade protectionism bullet

By Hu Weijia Source:Global Times Published: 2019/3/5 21:28:40

Amid speculation that senior officials from China and the US might meet later this month to end the year-long trade war between the two economies, many wondered whether US President Donald Trump would look for a new target of his economic attacks.

The US decision to withdraw duty benefits on Indian products under the Generalized System of Preferences program came at this sensitive time. Trump, who has vowed to cut the US trade deficit, said India had failed to assure the US it would provide reasonable access to its markets. It is also possible that Washington will take further steps to impose pressure on New Delhi.

It was unrealistic to expect that India would be immune to Trump's protectionism because of the Indo-Pacific strategy, which has enhanced the strategic relationship between Washington and New Delhi. If India had any domestic companies similar to China's telecom giant Huawei, which has established a leading position in global markets, those Indian companies would also face a US crackdown.

With "America First" as Trump's guiding principle, no country can count on getting special treatment from the US. Not only China but also India and other Asian nations will sustain blows as a result of Trump's protectionism. Washington will perhaps shift its focus to other countries that enjoy a trade surplus with the US, once it ends the trade war with China. 

Asia has been a traditional production base for the US, and the region has a big trade surplus with the world's largest economy. With Trump's plan to bring jobs back to the US, supply chains between the US and Asia may be greatly disrupted under Trump's trade policy. Most Asian countries must prepare for a trade conflict with the US as Trump tries to reduce the trade deficit.

The Indian government announced its "Make in India" strategy in 2014, with the purpose of turning India into a new global manufacturing center. India's ambition to become one of the globe's greatest technology hubs and foster homegrown enterprises with global influence like Huawei will lead to conflicts with the US sooner or later.

The US trade war with China gives observers a chance to anticipate other upcoming conflicts between the US and Asian nations. The US is unlikely to import products from Asia as generously as it used to. This poses a serious challenge to the entire Asian production chain, which is highly dependent on the US market.

It's now more important than ever for Asian countries to increase imports and pursue economic interdependence. 

If China can launch new policies to boost domestic consumption and increase imports from other Asian countries, it can play a positive role in Asia's economic development.

The author is a reporter with the Global Times.


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