Maybe a zero tariff on Harley Davidson motorcycles would do the trick. Or maybe not.
Duties on these motorcycles are one of the things U.S. President Donald Trump has brought up again and again as the two ‘natural allies’ have stumbled into a mini trade war that everyone seems a little befuddled by.
After all, everything seemed to be going well. The Indo-Pacific Strategy Report that the United States talks about released earlier this month talks about working to operationalise the Major Defence Partnership with India, reiterating that the Major Defence Partner is a “status unique to India”. The countries conducted their first ‘2+2’ dialogue last year (the Indian defence minister and foreign minister with the U.S. secretary of state and secretary of defence). The Report says that the Indo-Pacific is the ‘priority theatre’ for the U.S. – and therefore, India is its main ally in this theatre.
After a decade in the works, in 2018, the two countries signed the COMCASA (Communications Compatibility and Security Agreement) deal. India is now part of less than 30 countries whose military communications network is aligned to the U.S. and which means it can procure high tech drones and other surveillance equipment from America.
After Modi came to power in 2014, the strategic partnership between the two countries had grown swiftly. The Modi government pushed through another deal, LEMOA (Logistics Exchange Memorandum of Agreement), in providing U.S. troops basing facilities on a case-by-case basis. This, and the resolution of the nuclear liability deadlock through effective insurance policies, and the ratification of the Convention for Supplementary Compensation (CSC), by the Indian government have been major breakthroughs in the bilateral relationship made possible by Modi and Obama reinvigorating the relationship. It is based on such advances that Pittsburgh-based Westinghouse is planning to build six nuclear plants in India.
These measures revived Indo-U.S. ties which had run into the troubled waters of historic doubt and apprehension, not least from the strong Left-leaning core of India’s Congress Party which was in power till 2014. After the historic civil nuclear deal between the two countries in 2008, things had gone steadily downhill. But the last five years have seen an exponentially re-energising of the India-U.S. strategic relationship – cheered on, let’s not forget, by the Indian diaspora in America which is now the best educated and wealthiest minority in that country – and India, despite having never signed the Non-Proliferation Treaty (NPT), and backed by the U.S., joined key nuclear proliferation control forums including Wassenaar Arrangement, the Australia Group and the MTCR (Missile Technology Control Regime). There is heightened anticipation that despite a strong Chinese opposition, India will be made part of the Nuclear Suppliers Group – the last of the four such groupings – which would seal its place as a unique, and uniquely responsible, global nuclear power, and a favoured ally, perhaps the favoured ally, of the U.S..
All this, in America’s eyes, would make India an irretrievable partner in its ‘Asia pivot’ to jointly manage the Indo-Pacific including the Indian Ocean Region, and balance the ambitions of a risen China.
All very well – until Trump, already in a bruising trade war with China, decided to start another with India. The U.S. is India’s biggest trading partner (more than $51 billion a year) and India has a trade surplus with the U.S. (something that irks Trump who, somehow, does not appreciate that such discrepancies work-in-progress). Trump has cancelled India’s Generalized System of Preferences (GSP) eligibility giving a list of Indian exports to the U.S. duty-free – adding a $300 million tariff bill to U.S. imports of several Indian products. India, in turn, has added fresh tariffs on 28 U.S. products.
This in addition to the Trump administration pushing India to stop its oil exports from Iran – even though the consequences of that is Iran threatening to connect its Chabahar port, where India has poured millions of dollars as a balance to Pakistan’s neighbouring Gwadar port which is supported by the Chinese. Gwadar is connected to the China-Pakistan Economic Corridor, or the part of China’s Belt and Road Initiative that runs through Pakistan.
If it is China that Trump wants to balance, then how does it make sense to tie India’s hands in Iran? But then, Trump wants to fight a simultaneous war with Iran too.
Trump also wants India to stop buying Venezuelan oil and prevent (Chinese) Huawei’s 5G services roll-out in India, and renege on its contract to buy Russia’s S-400 Triumf Air Defence Missile System.
To fulfil these demands is difficult for India. China remains one of India’s biggest trading partners, and one of India’s strategies to balance the ‘all weather friendship’ between China and India’s arch rival Pakistan is deeper economic ties. China is also developing more intricate, and for India, worrying, ties with Nepal, and thus deepening India’s old concerns of a two-front threat.
With Russia, the situation is even more complicated. Russia is India’s oldest ally and the source of much of its armaments in the early years of the republic. The Soviet-India relationship was critical to India through most of its early years and through the Cold War where Soviet support gave it much needed security cover, military material and even veto assistance on the Kashmir issue in the United Nations against Pakistan supported by the United States. Today, India is anxious about a growing closeness between Russia and Pakistan. As the U.S. plans to pull out of Afghanistan, and spreads its ballistic missile shield across Eastern Europe, Russia is moving to try and secure its eastern front by engaging with Pakistan which will play a critical role in the future of Afghanistan. While alliances are shifting, India cannot afford to abandon its old Russian friends.
Also, India remembers what happens to America’s friends when America no longer needs them. Pakistan received billions of dollars of military and civilian assistance as long as it was a ‘front-line’ state against Soviet-occupied Afghanistan, and the Reagan and Bush administration were willing to provide certification (under the Pressler Amendment) of its nuclear programme needed for it to receive American aid as long as the Soviets were in Afghanistan. But the moment the Soviets left, the Bush administration refused to provide the certification, slashing aid to Pakistan.
India worries, as do other allies of the U.S., that temperamental Trump who can tweet about calling off military strikes in Iran supposedly only ten minutes before they were to be launched, will be forced to strike a deal with its trading partner China, leaving all those who pivot with it in a lurch.
Even as Trump loudly castigates U.S. tech giants – including the social media majors – for adversely influencing politics, he wants India to roll back its decision to ask these companies to store data locally. And if India refuses Trump is threatening to cap the influential H1B which brought most of the tech talent from India to the U.S. and helped build Silicon Valley to around 20% of the number now given to Indians.
Already tougher visa laws under Trump have led to shrinking numbers of Indian and Chinese students choosing to go to the U.S. for higher studies – the billions of dollars in fees that these students pay keeps many-a U.S. university thriving.
One is not sure if Trump has read American diplomat Teresita Schaffer’s excellent 2009 book India and the United States in the 21st Century: Reinventing Partnership, where the veteran South Asia hand makes the point that India’s strategic elite treasure ‘strategic autonomy’ and this “will incline India to look for opportunities to balance the world power structure even as it works closely” with Washington. She also makes the point that from non-proliferation to climate change, India and the U.S. often work at cross-purposes and have different priorities. Some of this has been resolved as an energetic Modi government is ready to make deeper commitments on both climate change and is ready show greater responsibility in non-proliferation (India’s membership at various non-proliferation forums is a recognition that though Delhi is unwilling to yet sign the NPT, it has impeccable non-proliferation records and has shown voluntary willingness to conform to NPT standards).
It is a book Trump should consider reading and while he is reading it, he should consider how far India and the U.S. have come – about 70 years ago, America worried that India might become the next Asiatic imperialist like Japan, and last year, the three countries were able to hold their first trilateral meeting.
And if zero tariffs on Harley Davidson motorcycles does the trick to solve this unfortunate friction between India and the U.S., maybe India should just give that to Trump.
Views are personal.
