[dropcap]C[/dropcap]apricious US trade and diplomatic policies seem to have dumped world diplomacy in disorder. Countries in Europe and Asia are getting increasingly confused and uncertain about staying ‘allied’ with the US. With President Donald Trump appearing as a highly unpredictable ‘ally’ even to traditionally close Britain, Germany and France, nations are confused over a changing diplomatic order.
Russia and China have certainly got closer to protecting themselves against US flip-flops in the region. India seems to be at its wits end as the US is pushing hard to block imports from India on one pretext or the other, restrict movement of intellectual persons, move more exports to India and exercise penal restrictions on trade with countries not in sync with US policies. The pressure threatens India’s independent trade and diplomatic policy pursuits. India is so fed up with US threats to trade and economy that, last Thursday, it took an unprecedented retaliatory action, raising import duties up to 100% on five products, including wheat, shelled almond, walnut and protein concentrate, imported mostly from the US. It invoked “emergency powers” to increase import duties under Section 8A of the Customs Act.
Earlier, India told the World Trade Organisation (WTO) that it proposed to raise duties by up to 100% on 20 products, such as almonds, apples and specific motorcycles imported from the US, if Washington did not roll back high tariffs on certain steel and aluminium items. The US has moved the WTO against India’s export schemes. India, along with several countries, such as China and Russia, has dragged the US to the WTO for creating artificial tariff barriers. Under the circumstances, no one is too sure about the possible outcome of a US-India 2+2 dialogue that may be held in July.
Meanwhile, the unilateral US pullout of the international nuclear pact with Iran, followed by its threat, last week, to impose sanctions on Tehran and also on foreign companies dealing with Iran are causing new headaches for oil-starved India. Other signatories to the international N-pact with Iran France, Germany, Britain, Russia and China too, are concerned. They disagree with the US and say they will try to salvage the deal and keep Iran’s oil trade and investment flowing.
India is highly concerned about the US action against Iran, as it is the second-largest oil importer from that country, after China. India is also under agreement with Iran to construct Chabahar port, outside the Strait of Hormuz, near Iran’s border with Pakistan, the first part of which was completed in December. The port and road project, when completed, is expected to give India direct access to Afghanistan and oil-and-gas rich central Asia, bypassing Pakistan.
Now, here comes the possibility of a US embargo on countries and companies dealing with Iran. Indian Oil Corporation (IOC), the largest importer of Iranian oil, may be forced to turn to other oil exporting countries, including the far-flung US, to prevent supply disruptions, further pushing up oil import costs. IOC planned to buy 140,000 barrels per day (bpd) of Iranian oil during this financial year and has an option to buy an additional 40,000 bpd. IOC is now thinking of tapping the spot market to buy US oil.
Like the rest of the world, India too was stunned last Thursday when Trump cancelled his planned summit with North Korean leader Kim Jong-un in Singapore on June 12, blaming increasingly hostile rhetorics from Pyongyang. The US President said he was pulling out of the meeting because of the ‘tremendous anger and open hostility’ in a recent statement from Mr Kim. Even as the summit date was nearing, both the leaders were busy engaging themselves in shadow-boxing and brinkmanship, playing hard ball.
The sudden cancellation of the Trump-Kim summit stunned almost everyone. Yet, within 24 hours of his announcement, President Trump sang a different tune, saying the summit could still be on. This could, probably, explain Russian President Vladimir Putin’s initiative to rope in PM Narendra Modi, earlier in the week, over their informal meet for almost six hours at Bocharev Creek in Sochi, to work on a “non-bloc security architecture” in the Indo-Pacific region. This is despite the fact that India is working with the US, Japan and Australia to bring stability for a rules-based order in the region. India is engaged with the US and its allies, Japan and Australia, across bilateral, trilateral and quadrilateral formats to bring stability in the Indo-Pacific region and make it inclusive amid China’s ambitions and BRI (Belt and Road Initiative) projects.
The developments may see the world order taking a new direction if the US continues with freak diplomatic manoeuvres across the globe.
(The author is a senior journalist)