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Trading  | June 23, 2018

Authored by Andrew Korybko via Oriental Review,

India just imposed reciprocal tariffs against the US in response to the ones that Trump just applied against steel and aluminum imports.

According to a filing that the Indian government made to the World Trade Organization (WTO), the tariffs on almonds, apples, certain motorcycles, and walnuts are intended to compensate for the estimated $240 million a year that India is expected to lose because of Trump’s tariffs, which represents a stunningly independent move from the Great Power that’s hitherto been doing everything that it could to remain in the US’ “good graces”.

India’s 2016 LEMOA logistics deal with the US unprecedentedly made the two countries military-strategic partners, and former Secretary of State Rex Tillerson even spoke about plans for them to remain so all throughout the 21st century. That said, the economic relationship between them has lagged far behind their military-strategic one, with India failing to attract US investors to its so-called “Make In India” domestic development program.

New Delhi may have thought that it could woo American factories from neighboring China amidst the deteriorating trade ties between Beijing and Washington, but much to its surprise, Trump remained true to his campaign pledge that he wants US companies returning back to the homeland and not to simply “re-offshore” elsewhere.

As a result, India no longer considers itself to be as indispensable to the US’ 21st-century plans to “contain” China like it previously thought that it was, seeing as how the economic dimension of this grand partnership is being deliberately neglected in favor of focusing solely on its military-strategic aspects. India’s plans for becoming a world power are unsustainable without the strong growth that would be afforded by a 1990s China-like economic partnership with the US, and its decision makers are now beginning to fear the consequences of indefinitely remaining the US’ “junior partner” for the rest of the century.

It’s with these worries in mind – as well as the ever-present threat of CAATSA sanctions should it go forward with its planned S-400 missile deal with Russia – that Prime Minister Modi paid informal visits to his Chinese and Russian counterparts in providing India with the option of a Eurasian “rebalancing” in the event that its pro-Atlantic pivot of recent years fails to yield the expected comprehensive – and especially economic – dividends.

There’s still a lot of lingering distrust between India and China that probably won’t ever fully go away, which is why India’s new strategy might be to rely on Russia as a means for “balancing” its relations between the US and China in a bid to clinch better deals from each.

Unfortunately for India, the US will inevitably force New Delhi to choose between it and Russia.

The ‘best-case’ scenario of siding with the US over Russia is that India will remain among the most privileged of Washington’s ‘junior partners’, while the worst-case eventuality is that it will be provoked into a border conflict with China.

As for the Russian angle of this equation, the most advantageous outcome is that Moscow brokers a deal between India and China to combine their competing “Asia-Africa Growth Corridor” and Silk Road megaprojects into a single hemisphere-wide multipolar connectivity network, while the “worst” that can happen in this scenario is that Russia remains the “balancing” fulcrum for managing India and China’s continued competition in Afro-Eurasia.

India is therefore at an historic crossroads that will determine its strategic trajectory across the coming century, and it’ll probably have to make an irreversible decision by the end of this year.

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