Why in News: Trump’s tariff war is disrupting global trade but offers India and the Global South a chance to push multipolarity and fairer economic order.
Introduction
- The ongoing tariff war spearheaded by former U.S. President Donald Trump reflects a broader disruption in the liberal international order.
- Protectionism, sanctions, and coercive trade practices have exposed the fragility of globalisation and its inequitable benefits.
- While these moves appear detrimental to the Global South, they also present opportunities for recalibration of international economic relations, greater multipolarity, and a fairer world order.
Rationale Behind Trump’s Tariff War
1. Domestic Political Imperatives
- Appeals to America’s “silent majority” disenchanted with globalisation, outsourcing, and inequality.
- Economic populism coupled with xenophobic and nationalist politics.
- Sanctions on 30+ nations and tariffs on 70+ countries justified as protecting U.S. workers.
2. Economic and Strategic Motivations
- U.S. aims to maintain primacy over a rising China (26% of world GDP vs China’s 17%).
- Heavy subsidies to agriculture and industries, while pressuring others to open markets.
- Dollar hegemony maintained by discouraging alternative global currency frameworks.
- Discriminatory tariff walls: 350% on tobacco, 200% on dairy, 120% on fruits — even while pressuring India to open agriculture.
3. Bipartisan Consensus in U.S.
- Beyond Trump’s personality, reversing deindustrialisation and checking China enjoys bipartisan support.
- Tariff regimes used as geopolitical leverage — from Ukraine to Indo-Pacific strategies.
- Illustrates a continuity of U.S. protectionism historically embedded in mercantilist statecraft.
Implications for India and the Global South
1. Impact on India
- Sectors hit: textiles, jewellery, auto components, metals.
- Pressure to abandon oil imports from Iran/Venezuela and to relax import duties (e.g., cotton).
- U.S. renewing engagement with Pakistan undermines India’s strategic position.
- Two-front challenge (China-Pakistan nexus) worsened due to weakened Indo-U.S. trust.
2. Global South at Large
- Reinforces inequities of neoliberal order where developed countries weaponise trade.
- Vulnerability of export-dependent economies exposed.
- Highlights fragility of multilateral institutions like WTO, IMF, and World Bank.
Lessons for India
1. Strategic Autonomy and Multipolarity
- India must revisit the assumption that the U.S. is a natural counterweight to China.
- Reinvest in multi-alignment (not limited alignment), strengthen South-South cooperation.
- Champion multipolarity as an alternative to both unipolar U.S. dominance and Sino-U.S. bipolarity.
2. Assertiveness in Negotiations
- Compliance with unilateral U.S. diktats (e.g., halting Iranian oil imports) has weakened India’s bargaining position.
- Lesson: bullies respond only to strength.
- Need for issue-based coalitions with Global South, BRICS, SCO, and G-77.
3. Recalibration of Foreign Policy
- Modi government’s personalised diplomacy and diaspora-focused symbolism has yielded limited results.
- Instead, focus on substantive strategic outcomes, long-term economic strength, and regional goodwill.
- Restore credibility of India’s non-alignment as a pragmatic multi-alignment strategy.
Opportunity for the Global South
1. Redefining the Global Economic Order
- Tariff disruptions expose the inherent inequities of neoliberal globalisation.
- A “New Economic Deal” can be envisaged — equitable trade, fair taxation, and reduced debt vulnerabilities.
2. Strengthening Multilateralism
- Push for reforms in WTO, IMF, UNCTAD to better represent Global South.
- Collective bargaining against unilateral coercive measures.
3. Building South-South Solidarity
- Leverage platforms like BRICS, IBSA, African Union partnership.
- Pool resources in technology, climate action, food and energy security.
Structural Reforms Needed in India
- Manufacturing: at four-decade low; must boost Make in India with genuine competitiveness.
- Employment: high unemployment requires labour-intensive industries and skilling.
- Investment: stagnant private investment calls for predictable policies and restored business confidence.
- Scientific Research: inadequate spending compared to peers; need for robust R&D ecosystem.
- PSUs: redeploy strategically, as China does with SOEs, for national interests.
Way Forward
1. Domestic Strengthening: restore trust among stakeholders, ensure equitable growth, reduce cronyism.
2. International Partnerships: forge ties beyond the U.S. — Europe, ASEAN, Africa, Latin America.
3. Bipartisan Consensus: cultivate foreign policy that transcends ruling party interests, ensuring continuity.
4. Championing the Global South: India must act as voice of developing nations — on debt justice, technology transfer, and climate finance.
5. Multipolar World Vision: not transactional alliances, but an inclusive order balancing power and equity.
Conclusion
Trump’s tariff war epitomises the fault lines of a neoliberal global order that has long marginalised the Global South. While disruptive in the short term, these upheavals create an opportunity for India and fellow developing nations to push for structural reforms at home, forge solidarity abroad, and advocate a fairer global architecture.
UPSC Relevance
GS Paper 2 (International Relations): India–US relations, impact of protectionism on global order, multipolarity vs unipolarity.
GS Paper 3 (Economy): External sector, WTO & trade issues, challenges of globalisation, tariff and non-tariff barriers.
Mains Practice Question
Q1 “Trump’s tariff war has exposed the fragility of the liberal international order but also created an opportunity for the Global South.” Discuss India’s strategy to turn these disruptions into an advantage.
