Trade, terror & tariffs

THE optics were perfect, but not the mathematics. US President Donald Trump heaped praise on Prime Minister Narendra Modi, but he also raised the bogey of reciprocal tariffs and put the onus on India to buy more oil, gas and military hardware to bring down the trade deficit. The US is one of the few countries with which India has a trade surplus, but this advantageous situation might change if Trump has his way. And he usually does. The US President candidly admitted that Modi was a much better, tougher negotiator than him, but he stopped short of patting himself on the back for being a master of coercive diplomacy.

It is laudable that the two leaders have resolved to more than double the bilateral trade to $500 billion by 2030 and begin talks for a fair and mutually beneficial trade agreement. PM Modi’s negotiating skills will be put to the test to ensure that the pact is not skewed in favour of the US.

The Modi-Trump meeting has been particularly fruitful in the defence and security domains. The two nations have unveiled an ambitious plan to ink a new 10-year defence pact and pursue co-production of key weapons and platforms. Trump’s announcement that the US has approved the extradition of Tahawwur Rana, a 26/11 plotter, is a stern warning to Pakistan — it should no longer let its territory be used to carry out cross-border terror attacks. This tough talk will intensify the pressure on Islamabad to punish the perpetrators of the Mumbai and Pathankot terror attacks. And Pakistan will feel even more jittery if the proposed supply of US F-35 stealth combat jets to India sees the light of day. Trump’s ‘tariff terrorism’ might be a bitter pill to swallow, but a bigger American role in India’s defence preparedness is an attractive proposition for New Delhi.