It is interesting to see the havoc created by the tariffs announced by Donald Trump, who became President for the second time after a loss in 2020. He was promoted by the largest corporate oligopolies led by Elon Musk. The recent announcements and speeches by Trump create suspicion about his mental stability.
Tariffs changed every day.
He announced a 26% tariff on India and many other countries, but 54% on China, which he increased to 104% and then to 125% when China retaliated. China has also imposed 125% on US imports.
Then he announced a pause for 90 days. Should we not suspect?
Not only China, the European Union also retaliated. Canada, Mexico, and even Namibia have retaliated. The words used by him that countries are licking his ass is unimaginable and barbaric. He announced that stock markets are going to boom and his company is supposed to have made $460 million in a day, and some in the White House have made billions.
Already the US Senator Hakeem Jeffries (Leader of Democrats) has started the process to enquire into alleged market interference.
Why a pause?
Why all of a sudden did Trump announce a pause on the tariffs for 90 days except on China? The reasons are being speculated. Is it due to pressure from his supporters from corporates? Is it due to EU retaliations? Is it due to other countries wanting bilateral deals? Or is it due to the fall in the bond market? All of that!
While the others retaliated, India is crawling. Some argue that assembling units will come to India from China, Vietnam, and South Korea. The same was told during Covid but nothing much happened.
India’s Exports
India is not a big exporter when we compare with China. China’s exports to the US are $688 billion in 2024, whereas that of India is $140 billion. So the impact on India may not be much due to tariffs.
As per reports of the Commerce Ministry in Feb 2025, India’s total exports have reached USD 778.21 billion in 2023-24. Out of this, 17.9% is to the USA, 8.23% to UAE, 5.16% to the Netherlands, 3.85% to China, 3.33% to Singapore, 3% to the UK, 2.67% to Saudi Arabia, 2.55% to Bangladesh, 2.27% to Germany, 2.02% to Italy (total 51% to 10 countries), and 49% to the other countries.
China’s Exports
Just to compare, China’s exports are 14.8% to the USA, 8.12% to Hong Kong, 4.66% to Japan, 4.4% to South Korea, 4.07% to Vietnam, 3.48% to India, 3.28% to Russia, 2.97% to Germany, 2.96% to the Netherlands, 2.58% to Malaysia, and 48.68% to other countries (2023 data).
If we see region-wise, China’s export to ASEAN is $982 billion, to the EU is $785 billion, and to the USA is $688 billion. The total exports are $3.58 trillion or $3500 billion, while that of India is $778 billion. So both China and India need not worry. Both can look for alternatives.
China and India
In China, education, healthcare, and housing are provided to all, and basic amenities as well as employment/unemployment allowances are available to all.
So let’s not compare India and China. They will have their own trade war or even war and win. But we are lagging behind.
What’s happening in India?
What we do in India is important. We are being bullied by Trump. We have already reduced tariffs on many items. We have reportedly agreed to buy MIG-21 fighter jets, which Elon Musk himself called junk. Our Commerce Minister was in the US for days with no result. Adani may be arrested if he lands in the US for investigation, which probably we are trying to stop.
Our people were sent back with chains, which some countries refused to accept and sent their own planes to bring them back with honor as they were not criminals. Newspapers say 3 lakh students working in the USA are going to be sent back.
By remaining as a slave of the USA, India cannot gain. We have the highest population. We have purchasing power. We got the technology for steel-making from the USSR when the US refused. When they refused to give cryogenic engine technology for our space mission, we developed it ourselves.
We had all along supported Palestine, but now we are exporting arms, ammunition, and missiles to Israel through Adani, and the genocide continues. We claimed to bring an end to the Russia-Ukraine war. Now it has become a joke. We claimed to be the G21 leader, which was a rotating chair for a year without any gains for the people of the country.
To please the USA, Jio of Ambani and Airtel of Sunil Bharti Mittal have agreed to buy space technology for internet from Elon Musk’s SpaceLink. This will be dangerous for our defence. We have already allowed Elon Musk to have his Tesla showrooms at Delhi and Mumbai on favourable terms to him, when Tesla sales are going down in the US and other countries.
These are some of the non-tariff measures visibly seen already, and what is happening secretly is not known to any of us.
Failure of the Global Order
Certain things are clear. The World Trade Organisation is finished. Free trade talks have ended. Bilateral agreements are going to be the order of the day. ASEAN, European Union, African Union, etc. are going to be more active. We were a founding member of RCEP but we came out. We may have to rejoin. BRICS has also become weak because of India’s enmity with China. With more countries antagonised by the USA, China is likely to become closer to these countries as it has become the manufacturer for the world, technology leader, building 70% of the ships for the world, and exporting everything from coir pith to nuclear reactors. You name anything, they have it. The Chinese Army and weapons are also superior, if not equal, to those of the US. China has invested $759 billion in US bonds. If it decides to withdraw, the US economy will be affected.
Oligopolies have taken control
In the US, Elon Musk, Jeff Bezos, Mark Zuckerberg, Bill Gates, etc., are controlling Trump as they financed him. As Senator Bernie Sanders says, “Earlier they were controlling from behind. Now they are in the forefront.” The same thing is seen in India. Adani, Ambani, Mittal, Tatas, and a few others are financed, protected, given tax concessions, loans written off, and they direct the policies of the government. History has shown that they—the neo-rich oligopolies—have always aligned with fascists. For them, profit is the only goal. This is the danger which everyone should worry about. For them, climate change is not an issue. Poverty and hunger are not issues. Equality is not acceptable. This is the worry we should have and talk about.
India has to wake up
It’s time for India to regain its respect. We can’t be treated as slaves. The USA is on a weak wicket. Opposition to Trump and Musk is growing within the US and outside the US. The corporates who supported Trump also want their pound of flesh.
Like the 2008 US financial crisis, a new crisis is on the horizon. The world is going to change.
Jaguar, Land Rover, Audi, and BMW have stopped exports to the USA. Many Swiss watch companies, including Rolex, have stopped shipment. Many more are being reported every hour. Depending on the US, which is the biggest borrower and who treats us as slaves, is going to be disastrous. The dollar, which is their advantage, and which does not have gold to support it, will fall if the other countries decide on alternatives.
What India has to do?
India has to use this as an opportunity.
- Strengthen the economy by shifting the policies towards the majority instead of the minuscule minority they are looking after for 11 years.
- Strengthen and expand public sector and public services. They will transform the economy.
- Devise a program for banks similar to the Integrated Rural Development Program (IRDP). It can be an Integrated Rural as well as Urban Development Program. 52 crore Mudra loans have to be verified. Who are these beneficiaries? Do they continue their business? If they are, why is it not reflected in the number of MSMEs? The Indian economy is bank-based. By expanding public sector banks, their branches, and at least doubling the staff, employment can be generated directly and indirectly. Outreach of small credit will increase buying power and improve the economy.
- Provide free and compulsory education to all up to Class XII. Have a massive skill development program.
- Provide employment to at least one person for every household in government, public sector, or public services.
- Have cordial relationships with neighbours, including China.
“No one is going to give you the education you need to overthrow them,” says a proverb.
We need to find our own ways to strengthen the economy as well as democracy.
This is the Worst self inflicted wound that I have ever seen an administration impose on a well functioning economy:
Janet Allen Former US Treasury Secretary
Thomas Franco is the former General Secretary of the All India Bank Officers’ Confederation and a Steering Committee Member at the Global Labour University.
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