Are new tariffs on India, the last straw?

 INDIA APPEARS UNWILLING TO SUBMIT

WILL IT NOW FOCUS ITS FUTURE ELSEWHERE?

Yesterday the Trump administration at the behest of Lindsey Graham and the U.S. senate put 50% tariffs on India. It is supposedly because India is buying oil from Russia. Oil that mostly ends up being shipped to Europe. India has claimed hypocrisy, as the U.S. is till buying fertilizer, uranium and other products from Russia. It seems both the U.S. and Europe are willing to exempt items that they feel are essential for them, but India cannot. It is reported that Trump called Modi 4 times in recent days, but got no answer or call back. India and others may soon make the decision that trade with the U.S., while important, can be eliminated by nurturing trade with its neighbors and more friendly partners.

We also saw this week a result of trade wars, Intel, once the symbol of the U.S. much touted technology economy, being in effect bailed out by the U.S. government.  Much of this is the result of U.S. government forbidding sales to China of certain silicon chips. China retaliated by going full steam into the chip business and now outselling  U.S. producers by a wide margin. We also see China reduced purchases of U.S. grain and moved their business to Brazil, Argentina and Russia. Then Europe is also being pressured to adopt U.S. policy and with their economies already on life support, it can be expected to cause further loss of market share. The hope of isolating certain countries may end up isolating the 750 million population western countries from the other 6 billion of the world's population. 

India has been in consultation with both Russia and China in the last weeks. India has sought a position of neutrality and non-alignment, while under extreme pressure to take geopolitical sides. Neutrality is no longer allowed, the Bush doctrine of " You are either with us or our enemy " is still in effect. India is already considering cancelling it F-35 orders and buying aircraft somewhere else.

This weekend is the 25th summit meeting of the Shanghai cooperation organization in Tianjin, China. It will be attended by 20 world leaders and 10 international organizations. Xi, Putin, Modi and leaders or representatives of Egypt, Iran, Pakistan, Malaysia, Indonesia, Vietnam, Cambodia, Laos, Myanmar, Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, Belarus, Afghanistan, Mongolia, Turkey, Sri Lanka, Turkmenistan, Armenia, Azerbaijan, Maldives, Nepal and representatives of the gulf nations. Un.secretary Guterres will also attend. The theme is viewing the multi-polar world.

This makes up the vast majority of the Asian nations and one must wonder how this is viewed by South Korea and Japan, who are also under severe pressure to take sides by supporting Ukraine and sanctions on China. It may become a very hard decision, since they do much business with these countries.

Japan who was pressured by the U.S. to stop selling certain machine tools to China resulted in China cancelling billions in orders and sourcing them from Russia.

We will see how all this works out, can the west pressure the rest of the world to submit or will it end in the isolation of the west from a majority of the worlds commerce.