China's successful pressure on the Trump administration to back down has set an example for the whole world, and it didn't take long before an "apprentice" followed suit in a fairly convincing manner. Modi has changed his previously submissive attitude toward the US and turned his矛头 against America.

Modi

According to a report by Bloomberg, the Indian government has submitted a statement to the WTO. The statement indicated that due to the impact of the US's 25% tariff on steel and aluminum products, which seriously affected India's steel exports, India decided to impose equivalent tariffs on imports from the US. This marks a shift in India's stance.

As is known, after Trump announced the implementation of the "reciprocal tariff" policy, India was one of the most proactive countries. Modi not only went to the US to negotiate with Trump but also proposed the idea of "zero-zero" tariffs for specific goods. There were even reports that India might be the first country to reach a trade agreement with the US.

Unexpectedly, the US reached an agreement with the UK first, and then India suddenly flipped. It is worth noting that just one day before India suddenly turned against the US, China and the US had just reached a tariff agreement in Geneva, canceling or suspending a total of 91% of the additional tariffs, marking a temporary cooling of trade friction between the two largest economies in the world.

Modi and Trump

Externally, it is widely believed that inspired by China's success case, India also wants to try the same trick. However, whether India can successfully safeguard its legitimate rights and interests like China or just imitate poorly without any effect remains to be seen. If India is determined to retaliate, it may achieve its first revenge since Trump's re-election.

In fact, it's not surprising that Modi flipped. India has been cornered by US tariffs. Since the US imposed tariffs on steel and aluminum citing "national security" in 2018, India has lost about $1.2 billion in export revenue annually and has not been granted the same exemptions as the EU and Canada.

Indian workers stacking pipes

This time, the US raised the tariffs on Indian goods to 26%, directly affecting $7.6 billion in exports, involving core industries such as steel and automotive parts. Policy reversals and infrastructure delays have led to foreign capital withdrawal, and the Modi government urgently needs to protect domestic enterprises through countermeasures.

India once hoped that the Sino-US trade war would attract capital transfer capacity, but after the ceasefire of Sino-US tariffs, global investors found that the cost advantage of "replacing China" decreased, greatly reducing the attractiveness of India as a "backup option". In this situation, if the Indian government continues to compromise, it may only end up worse off.

In fact, India's influence on the US market cannot be underestimated. For instance, India is the second-largest export market for medical devices in the US, and US chemical companies like DuPont heavily rely on the Indian market. However, India's manufacturing sector has a fatal flaw, which is its heavy reliance on Chinese raw materials. A countermeasure against the US might end up harming itself.

Indian workers forging steel

Compared with China, India's move is unlikely to directly make the US back down. Therefore, it is speculated that Modi may hope to increase his bargaining chips in negotiations with the US through this counterattack. If the US-India negotiations restart, India may exchange partial market openness for tariff exemptions. But if the US doesn't buy it and continues to impose additional taxes on Indian IT and pharmaceuticals, India may struggle to cope.

Although India claims itself as the "hegemon of South Asia," its actual influence is limited. Moreover, while India sues the US at the WTO, advocating multilateral rules, it also frequently initiates anti-dumping investigations against China, being questioned for abusing trade remedies. This "double standard" behavior undermines its moral appeal.

However, India's recent counteraction once again proves that in today's declining unipolar hegemony, no country can remain aloof. Cooperation rather than confrontation is the only way out. What India needs to do now is to strengthen cooperation with other countries and jointly resist the economic bullying of the US, perhaps there is still a chance.

Original article: https://www.toutiao.com/article/7504167178770383410/

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