- Aug 12, 2025
- Major General Harsha Kakar
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Pushing Allies Under the Bus
The quote ‘To be an enemy of America is dangerous, but to be a friend is fatal,’ is attributed to Henry Kissinger, though he may not have been the originator. However, India is now finding this to be true, especially with a vengeful Trump targeting India. His recent outbursts against India when placing 50% tariffs began increasing in tempo post PM Modi’s statement in parliament on the ceasefire on Operation Sindoor. PM Modi had stated, ‘not a single world leader asked us to stop the operation. Our actions were precise and non-escalatory, just as we had committed.’ This was in reply to Rahul Gandhi mentioning, ‘It is obvious the PM has not said that Trump is lying.’ This was sharply against Trump’s almost 30-plus repeats of having ended Operation Sindoor, apart from those of his staff. It was a slap on all Trump had been claiming. PM Modi made his statement in parliament on 29th July, and Trump made his first announcement on tariffs on 30th July. His subsequent announcement of additional 25% tariffs followed a few days later, indicating growing frustration and anger. For Trump, the statement by PM Modi implies that India will never endorse Pakistan’s letter of recommendation for a Nobel award for Trump. It will also weaken Pakistan’s recommendations, which led to Trump inviting Asim Munir for a luncheon at the White House. Another reason for Trump’s growing frustration against India is its reluctance to open its farm and dairy sector to US products, as it would impact a very large workforce. Additionally, Trump views India’s membership in the BRICS as anti-US. Trump is also frustrated at being unable to end the Russo-Ukraine conflict, which he had sworn to do in the first few days of his presidency. Putin has been playing Trump along, aware of Trump’s desperation for the Nobel. Russia has no intention of ending the conflict unless it controls the territories it desires, and also keeps Ukraine under its thumb. Though Putin would be meeting Trump on 15th August in Alaska, he will not bend until his terms are met. Trump, in his desperation for the Nobel, may even throw Ukraine under the bus. Trump justified his additional tariffs threat on India by mentioning, ‘India is not only buying massive amounts of Russian Oil, they are then, for much of the Oil purchased, selling it on the Open Market for big profits. They don’t care how many people in Ukraine are being killed by the Russian War Machine.’ He is now seeking to isolate Russia by compelling India to change its strategic alignment. As per reports, China is the largest buyer of Russian oil. In 2024, China imported USD 62.6 billion worth of oil, compared to India’s USD 52.7 billion. Trump cannot increase tariffs on China (already 50%) for procuring oil from Russia, because China can hit back by blocking the sale of rare earth minerals. He thus chose an easier target, India. Geopolitical and economic considerations compelled Trump to avoid challenging Beijing. India refuses to be cowed down by Trump’s threats. Coinciding with Trump’s announcement was the visit of the Indian NSA, Ajit Doval, to Moscow. Doval held talks on expanding defence cooperation, including procurement of additional S400 missile systems and other weaponry from Russia, trade in local currencies, among other issues. Though the visit was preplanned, it indicated that India will continue with its independent foreign and economic policies. Putin is scheduled to visit India later this year. India’s diplomatic response also conveyed that it would stand firm. The statement released by the MEA mentioned, ‘They (India’s oil procurements) are a necessity compelled by the global market situation. However, it is revealing that the very nations criticising India are themselves indulging in trade with Russia.’ It went on to add, ‘Like any major economy, India will take all necessary measures to safeguard its national interests and economic security.’ A desperate Trump termed the Indian and Russian economies as ‘dead.’ His frustration grows as India refuses to bow down, and PM Modi does not respond by rushing to Washington or requesting delays as other global leaders, including those from Japan and Switzerland, have done. As rightly stated by the MEA, Indo-US relations have seen ups and downs over the decades. This is another hurdle that it would cross. Once again, Trump has misread India and its internal politics. The Indian leadership cannot bend or beg. It will stand its ground. Accepting Trump’s demands would be political suicide for the current dispensation. Hence, silence from the Indian leadership. For once, all political parties are together against Trump’s ‘economic blackmail.’ India will act maturely, not hit back, hoping to end the conflict with talks and a trade agreement, ensuring its key concerns are catered for. New Delhi is accustomed to prolonged negotiations for trade agreements, while Trump is in a rush. The India-UK Free Trade Agreement took 3 years to finalise. In the meantime, India will look at both internal and external options to offset US sanctions. Trump’s desperation for a Nobel has propelled him to ignore the importance of India in the Indo-Pacific. His growing proximity to Pakistan, including seeking to invest in its non-existent oil reserves, is intended to further push India. It is hoped that Indo-US defence ties are kept away from the ongoing trade conflict. India must not host the heads of state summit of the QUAD this year. Trump’s vision of the world is coloured by his belief that everything can be handled by trade and sanctions, which will not work; hence, the QUAD meeting would be counter-productive. Trump’s unilateral approach to trade is pushing the world to seek alternate alliances and means of payment, ignoring the US Dollar. Indo-Russia trade will now be in Rupee-Rouble, as will trade between most members of BRICS and SCO. The domination of the US Dollar on global trade will recede, and the man responsible for this will remain Trump. Trump’s transactional approach to leadership has displayed that he is willing to push long-term allies under the bus for short-term or individual gains. At the end of the day, even if a trade agreement is reached, the US will no longer be considered a trustworthy ally, something which will take decades to overcome. First published in The Statesman on August 12. Republished with the permission of the author.- Aug 11, 2025
- Viren S Doshi
WTO Metamorphosis: From US Founded System to CCP-occupied China's tool
Historical Background - WTO, US S and CCP-occupied China The United States indeed remains a member of the World Trade Organisation (WTO) till now, and it has been a member since the WTO's establishment on January 1, 1995, and was previously a member of the General Agreement on Tariffs and Trade (GATT) since January 1, 1948. There has been no formal withdrawal from the WTO by the US, despite serial criticisms from various administrations about its effectiveness and fairness. WTO, by default, has allowed CCP-occupied China to retain its Developing Country Status despite its trade monopoly. CCP-occupied China joined the WTO on December 11, 2001, after years of negotiations. It was granted developing country status based on the WTO’s self-declaration system, where members can designate themselves as developing countries to access special and differential treatment (SDT). SDT includes flexibilities like longer transition periods for implementing trade rules, softer tariff cuts, and certain exemptions. Why has CCP-occupied China retained developing country status in the WTO even now? There are several reasons as listed hereunder- 1. Self-Declaration System: The WTO does not have objective criteria for determining developing country status. Countries self-declare, and this designation is rarely challenged unless significant economic evidence suggests otherwise. When CCP-occupied China joined, its per capita GDP was low, and it faced significant developmental challenges, justifying its classification as a developing country at the time. 2. Economic Context at Accession: In 2001, CCP-occupied China’s economy was significantly smaller than today (about 13% of US GDP), with widespread poverty, particularly in rural areas. Its self-declaration as a developing country aligned with its economic conditions then, despite its rapid growth since. 3. Negotiation Dynamics: During accession, the US, EU, and Japan imposed certain conditions on CCP-occupied China, a closed market, opaque system. However, they did not block CCP-occupied China’s developing country status, possibly to secure its integration into the global trading system, hoping to bring it to the open market someday. The focus was on tariff reductions and market access rather than challenging its designation as a developing country, as they didn't anticipate that CCP-occupied China would turn this privilege into a trade monopoly so soon. 4. WTO’s Inertia: The WTO’s framework, rooted in agreements from the Uruguay Round (1986–1994), lacks mechanisms to reclassify countries as their economies grow. CCP-occupied China’s economic rise (now the world’s second-largest economy) has not led to a formal reassessment of its status, as the WTO relies on consensus, and CCP-occupied China resists reclassification. 5. CCP-Occupied China’s Strategic Use of Status: CCP-occupied China leverages its developing country status to maintain protections, particularly in agriculture and allied sectors, where it cites ongoing rural poverty and small-scale farming. This allows higher subsidies and trade protections, which critics argue distort global markets. The Impact on Global Trade The skewed global trade situation in favour of CCP-occupied China stems from CCP-occupied China’s ability to exploit these flexibilities while becoming a global trade powerhouse despite being a completely opaque market. For example, CCP-occupied China’s state-directed policies, covert and overt subsidies (as part of opaque systems) for state-owned enterprises (SOEs), and export controls (e.g., on rare earths) and opaque tax haven route operations to leverage trade opportunities through other entities have been criticised for creating unfair advantages, as seen in WTO disputes like the 2012 case brought by the US, EU and Japan. How has the U.S. reacted to this skewed trade position? The United States has been vocal in its opposition to CCP-occupied China’s developing country status and the broader WTO approach to SDT. Key points include: 1. US Criticism of CCP-Occupied China’s Status: The US argues that CCP-occupied China’s economic size and global trade dominance (e.g., largest goods exporter since 2009) make its developing country status outdated and unjustified. A 2019 memorandum from the then-Trump administration called for reforming the WTO’s approach to prevent advanced economies like CCP-occupied China from claiming SDT benefits, citing metrics like CCP-occupied China’s high outbound and inbound foreign direct investment and its 120 Fortune Global 500 companies. 2. Push for Reform: The US has advocated for clearer criteria to define developing countries, arguing that self-declaration allows economically advanced and yet completely opaque CCP-occupied China to gain unfair advantages, such as longer compliance timelines and export subsidies. This harms both developed economies and less developed countries that genuinely need SDT. 3. Actions Against CCP-Occupied China’s Practices: The US has challenged CCP-occupied China’s WTO compliance through dispute settlement cases (e.g., intellectual property in 2007, rare earth exports in 2012) and unilateral measures like Section 301 tariffs in 2018 and recent tariff escalation following 2023 and 2024 USTR reports on CCP-occupied China’s WTO compliance, highlighting its “state-directed, non-market approach” as a major challenge, accusing it of distorting global trade through subsidies, SOE favouritism and intellectual property violations. 4. Broader WTO Frustrations: The US has expressed frustration with the WTO’s inability to address modern trade challenges, including CCP-occupied China’s non-market practices. The stalled Doha Round and the WTO’s outdated rules (e.g., no explicit provisions on SOEs) exacerbate these issues. The US has also criticised the WTO’s dispute settlement system, at times blocking appellate body appointments to push for reforms. 5. Allied Support: The US is not alone; allies like the EU and Japan share concerns about CCP-occupied China’s trade practices and developing country status, as seen in the Trilateral Initiative to regulate state subsidies more stringently. However, achieving WTO reform is difficult due to the need for consensus among 166 members. Conclusion - Is WTO losing its relevance? The WTO’s allowance of CCP-occupied China’s developing country status reflects systemic flaws in its governance, particularly the lack of clear criteria for reclassifying economically advanced economies. This enables CCP-occupied China to exploit loopholes, maintaining protectionist policies while dominating global trade. The stalemate underscores the WTO’s struggle to adapt to a shifting global economic landscape almost making this organisation to lose its reverence as well as relevance.Reports View All
