“Biden, Trump and to some degree Barack Obama all had a common recognition or belief that America was overstretched, suffering from Imperial Overstretch, and there was a need to reduce its commitments around the world to some basic core areas.”
At the heart of the commitment is the Indo-Pacific, says Pramit Pal Chaudhuri, Practice Head of the Eurasia Group, a political risk consultancy based in the US.
“China is America’s primary strategic rival, and there is no difference between Biden and Trump on that score,” said Chaudhuri, speaking on The Gist. “But Biden being a Democrat was very focused on human rights … and that resulted in run-ins with countries like India.”
Trump did not raise these issues in his first term and is unlikely to raise them in his second term. But Chaudhuri believes one area which matters much to Trump is trade. He is expected to raise tariffs and “India should expect to be hit by some of them,” warned Chaudhuri although India does not figure in the list of 10 countries Trump has named.
The million dollar question is what his tariffs will be focused on this time. The last time it was India’s steel and aluminium, and Delhi promptly retaliated. But the worst tariff structures will target China.
China will retaliate by devaluing the Yuan, which is of concern to India as it means the world will be flooded with even cheaper goods from China, potentially disrupting India’s domestic industry.
But Chaudhuri believes by waving the tariff flag, Trump is basically saying let’s have a larger trade and technology agreement. This could tie in with what the Biden administration did, seeking to incorporate India into safe and secure supply chains for semiconductors, green tech, solar wafers and so on.
The question now is whether India’s plans to make chips would collide with Trump’s plans for reviving manufacturing in the US.
Tune in for more in this chat with Pramit Pal Chaudhuri of the Eurasia Group
