With Donald Trump every relationship is transactional

In the hundreds of thousands of words I have read about the new India-US trade deal, here’s one parallel I have not seen cited:

the deal and its power dynamics represent nothing that we in India haven’t seen before.

 

Basically it’s the same dynamic that prevails at a domestic level between the Indian government and our businessmen and industrialists.

 

   We saw it most recently in responses to the budget. These responses have now assumed a certain dull predictability. Each year the Finance Minister presents a budget. Sometimes it’s a good budget. Sometimes it’s a bad budget. Sometimes it works to the advantage of Indian industry. Sometimes it doesn’t.

 

   But here’s the thing: if you believed the responses of Indian business you would never be able to tell whether it was a good budget or a bad one. What’s more you would never even be able to guess if it worked to the benefit of the industrialists who were talking about it—or whether it hurt them.

 

   No matter what the budget says and no matter what it does to their businesses the captains of industry will declare that it is the best budget ever; that the Finance Minister is a genius; that India is set to become an economic superpower; and when they are asked to rate the budget out of ten they will all give it 12 out of ten.

 

   This televised post-budget chorus of the chamchas has become such a joke that journalists wonder why they have to shoot the budget programs live. They can just record them a week or two earlier because no matter what it is that the budget says, the industrialists, most of whom are powerful billionaires in their own worlds, will, like junior artistes in a Bollywood movie, still dance to the same tune.

 

   In moments of exasperation I have asked the few businesspeople I know why they need to do this. Off-the-record, they all say the same things: “we have no choice. The government is so powerful that we have to sing the praises of the budget. Even when the budget’s provisions hurt us we have to pretend that we have benefited. If we complain then the government‘s response will be to hurt us even more. Politicians are thin-skilled creatures who have no hesitation in responding irrationally. So what you dismiss as ‘chamchagiri’ is actually our survival instinct. Even if we get a bad deal we have to pretend to be the happiest people in the world. This the inequality of the power relationship.”

 

   I have a certain sympathy, if not much respect, for the industrialists who offer these explanations. Even in the post liberalisation era the government has enormous power. And if it unleashes its agencies on you then you might as well kiss your business goodbye. So the stakes are high and the options are very limited.

 

   Now, consider the power dynamic between the US and India. There are many obvious parallels. Our industrialists can pretend to be friends with politicians. But the relationship will always be transactional. Politicians will want things from business people. And if they don’t get them then photo ops and huggy-kissies will not make any differences.

 

   So it is with Donald Trump. Every relationship is transactional. If you don’t give him what he wants, then he may call you his best friend but he will still cut you dead. In this case, Trump wants at least three different things.

 

   One: he wants to show the world that America is powerful enough to choke Russia’s revenue streams. That means he wants to stop everyone from buying Russian oil. He has no interest in India’s claims about its sovereign right to decide who to buy its oil from. Nor does he give a damn about the Indian argument that cheap oil helps India’s economy and therefore its poor.

 

"We have accepted that we will not buy Russian oil. We have agreed to buy a staggering five billion dollars worth of US goods over the next few years."

   Two: he believes in tariffs both as a weapon and as an end in themselves. Not only will he use access to the massive US market as a way of rewarding and punishing those who advance or hinder US interests but he actually believes in tariffs as a means of generating revenue. Such is his obsession with the US balance of payments situation and with American exports and imports that not only is he ready to impose punitive tariffs but he requires that other countries buy massive quantities of US exports.

 

   Three: he is boastful and as he himself admits, extremely thin skinned. When he makes extravagant claims about deserving the Nobel Peace Prize and ending seven wars including the one between India and Pakistan he expects other countries to not only accept these claims but to cheer him on.

 

   When it became clear over the last few months that Trump would not compromise on any of these three demands in the case of the India -US relationship, we could either have gone it alone, ignoring Trump or decided to give in.

 

   It’s not practical in today’s world to ignore America or Trump and though we sat around waiting and hoping that he would change his mind, we have had to eventually accept that if we want to do business with America it has be on Trump’s terms.

 

   And so, one by one, we have agreed to everything. We have accepted that we will not buy Russian oil. We have agreed to buy a staggering five billion dollars worth of US goods over the next few years. We have accepted an 18 Per cent tariff on most of our exports to the US; less than the absurd rate that was being thrown around until we caved in and stopped buying Russian oil but still much more than the very low ( around zero percent on many of our exports) rates we were paying till Trump took office. We have been instructed to reduce or eliminate our duties on many US goods and we have agreed.

 

   Trump continues to claim he stopped the war between India and Pakistan and after initially saying that there was no third party involvement in the ceasefire we have stopped challenging Trump’s claims in the hope of keeping him happy.

 

   It’s easy to say that we have been humiliated. But it’s also pointless to go on and on about that. The dynamic here is the same unequal equation that we see between our industrialists and the Finance Minister at Budget time; the same ‘what choice do we have?’ position.

 

   And indeed that same chorus of the chamchas that follows the budget has begun again with our trade negotiators being hailed for their so-called bargaining skills while the tough decisions they have had to make are being obscured.

 

   We are too scared of Trump to lie about stopping the purchase of Russian oil but too embarrassed to admit it to our own people so ministers give evasive answers when asked. Buck passing (‘I don’t know so ask such and such minister’) is the order of the day. Minor tariff concessions generously granted by America are hailed as major victories for our negotiators.

 

   And nearly every excuse being offered by the government and its supporters for giving in to Trump’s demands is essentially bogus. Yes, maybe we should not rely so much on Russian oil but what stopped us for coming to this conclusion before Trump forced us to look for alternatives? Yes, it may be a good idea to dismantle India’s tariff regime but why didn’t we do it until Trump stamped on our feet?

 

   It’s time now for our leaders to admit the truth. We live in a world dominated by America which is currently run by a President who is determined to tear up the rules of the world order and who operates in an atmosphere of threats and chaos where hugely extravagant demands are made of other countries and organisations (such as NATO) . When he scales down his demands from totally unreasonable to merely outrageous (‘okay we won’t conquer Greenland; we will just take control of it’) the world acts as though good sense has prevailed.

 

   And while there is some evidence that Trump’s domestic policies are losing popularity with his electorate there is no real pushback in America against his foreign policy. So there is little to restrain him.

 

   Every country has had difficulties in coping with the Trump World Order, including the US’s traditional allies in the West. And he doesn’t intend to stop pushing for more.

 

   India cannot be an exception to this global trend. We have to learn to cope with Trump and his vision. So there is no shame in admitting that we have conceded most of his demands. We must play the long game here; Trump has only three more years in office and it seems unlikely that any successor will be as extreme.

 

   Let’s be honest with our people and concede that we are operating with limited options and are doing the best we can to get India-US relations on an even keel with an eye on the long term partnership.

 

   Nothing is achieved by lying and being evasive. People have seen through the march of the sycophants after each budget. And no matter how many falsehoods you tell them about the alleged triumph of this India-US deal, they will see through them as well.

 

   This is the world we live in. And it’s time to admit it and to treat the Indian people as adults and not as children who will be taken with tales of false victories and imaginary triumphs. It’s always a good idea to tell the truth.