February 11, 2017

The big risks from Trump’s actions and the world’s reactions

Around eight years ago, in the final years of George W Bush’s presidency, it had become fashionable to talk about American decline. Audiences in the United States (US) and around the world lapped it up for their own reasons. Books were written about the topic. Talking heads discussed it on television. A telegenic young politician from Chicago used it as a backdrop for his election campaign. In New Delhi, as in other capitals, people began to seriously re-examine their foreign and economic policy orientations as they contemplated a post-American world.

This is an archived blog post from The Acorn on Medium.

At the time, I was the odd one out at foreign policy roundtables arguing that America’s decline is overstated: The US had a declinist cycle that repeats every decade or so, and China had merely replaced Japan as the latest country to supposedly topple America from its №1 position.

I offered two reasons why. First, the US has a system that allows it to correct its errors and bounce back. As Winston Churchill famously didn’t say: The United States can always be relied upon to do the right thing — having first exhausted all possible alternatives.”

Second, the US is a global talent magnet: If asked to choose, the most intelligent people around the world would prefer to move to America than to any other country. This mattered in the industrial age. In the knowledge-economy, this matters a whole lot more.

As long as the US has these two strengths, I’d argued, you would be on safer ground betting on America than on China or anyone else. A number of profound foreign, military and economic policy recommendations follow from this very basic appraisal of the state of the world.

US President Donald Trump’s bold actions over the past three weeks place a big question mark over this assessment. Whoever might be the specific targets of his immigration policies at the current time, the fact that they might no longer be welcome in the US will give would-be immigrants pause for thought. The fear that living and working in America will no longer be safe” and stable as it has been for several years will deter some people from moving there. This is before they even apply for a visa. The number of visas denied to students, researchers and skilled professionals undercounts the losses that the US will take.

Under normal circumstances, we could have expected the self-correcting nature of the US political system to contain and reverse this damage. But circumstances are hardly normal, and it is uncertain if there is a passage back to the place America was before.

At this point, it looks like the people of the US have shot themselves in the foot.

In the unforgiving scales of the global balance though, America’s loss will be others’ gain. Universities in Western Europe, Australia, Singapore and China are likely to see more and better quality applicants. Over the next few years, the information technology industry in India will find it easier to hire higher productivity employees. In the short-term, consumers in many countries might enjoy lower prices while shopping. As multinational corporations and trading networks reorganise their supply chains, new winners and losers will emerge. Right now, we don’t know who they will be.

Such shifts of the tectonic plates of world’s politics and economics take their time and the impact will be felt over years and decades. The Trump administration’s foreign policy is moving things faster. Faster than the world’s chancellories can grapple with. Mr Trump has already alienated Mexico, Canada, Germany, Japan, Iraq, the European Union and even Australia. And these were the friendlier countries. China, Iran, North Korea, Syria, Libya, Somalia, Sudan and Yemen, never quite friends, have been deliberately antagonised.

The charitable view is that Mr Trump is resetting relations with allies and adversaries alike before he recasts them. That won’t prevent governments around the world from reading these moves, to use Charles Krauthammer’s words, as unmoored entries on a ledger of confusion.” They will all start hedging against the US.

Caught between a China seeking to extend its hegemony over the region and a mercurial US, the smaller East Asian countries will lose appetite to resist Beijing’s gravitational pull. The bigger ones will help themselves — which means higher defence expenditure and possible, eventual nuclearisation — and seek to create regional partnerships, not dependent on the US.

If Mr Trump reneges on the Iran deal, the Iranians will restart building the bomb. The Israelis and the Saudis will want to stop them. Here lies the risk of the US getting into another military conflict in the Middle East. Washington cannot prosecute this war without Saudi and Pakistani assistance, causing to the men in brass in Rawalpindi to gleefully open their al-Faida spreadsheets again. Beijing is unlikely to interrupt Washington while it is making a mistake.

That’s the bad news. The good news is that Mr Trump’s actions will create opportunities and favourable circumstances for India. The catch is that these might come before we are prepared to take them. At the moment, New Delhi is unlikely to want to take sides if the US and China get into a military conflict. Similarly, India would not want to take sides in a war with the US, Israel and Saudi Arabia on one side, and Iran on the other.

Projecting military power to contribute to a stable balance of power is one thing, getting wars where our interests are not directly affected is another. The Narendra Modi government would do well to invest in front-footed diplomacy to prevent India from being presented with a menu of unpalatable options.

Tailpiece: Fearing that they might be next on Mr Trump’s agenda, the Pakistani authorities pre-emptively sent the Lashkar-e-Taiba’s Hafiz Saeed to the naughty corner. They are back pretending his house is a jail, and the outfit that is operating under a different name is not the one they banned. New US president, same old charade.

This article first appeared in Business Standard: republishing is not permitted without permission

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