How the US decided China is too big to bully while punishing India with 50% tariff

Still smarting from President Donald Trump’s 50% tariffs, Indians have come to another bitter realization: The US leader appears to be singling New Delhi out, while giving Russia’s real backers in China a free pass.The Indian establishment, which largely welcomed Trump’s ascent to power and genuinely believed that the two were on the cusp of a mutually beneficial deal, seems somewhat shell-shocked. Few could have predicted the humiliation of being just about the only country that emerged from negotiations with higher tariffs than those it was threatened with. This has not been Indian diplomacy’s finest hour; Reuters quoted an official as saying “we lacked the diplomatic support needed after the US struck better deals with Vietnam, Indonesia, Japan and the EU.”Perhaps that is why the response from the foreign ministry has been relatively muted. Hoping that negotiations could still be salvaged, New Delhi has called the tariffs “unfair, unjustified and unreasonable,” correctly pointing out that the US continues to buy fertilizers and uranium from Russia worth billions of dollars a year. Typically, the statement also attacked the European Union, which wants freer trade with India, not tariff walls — but then attacking the EU is everyone’s preferred move in international relations, including Europeans. It is true that India is hardly alone. The Japanese, for example, have resumed purchases of crude oil from Russia, but nobody seems to be going after them. What the Indian statement did not mention, but could have, is that China has received no penalties for its hefty energy purchases from Russia.That silence, however, covers a great deal of indignation. China is a much more sensible target for Trump’s ire if controlling Russia is really what he wants. Beijing provides far more meaningful support — economic and political — to President Vladimir Putin than New Delhi does. But China, it appears, is too big for Trump to bully now. Its negotiators will likely be granted more time than others to come to a deal with the US, and it can continue to support Moscow with an impunity denied to India. (Trump said this week he could punish Beijing with additional tariffs over Russian energy, though one of his top advisers played down the likelihood.)A New Delhi unhappy about the differential treatment Beijing is receiving will shift the target of its resentments from China to the US. Policymakers who would welcome a US trade war against China feel very differently about an America that shies away from that confrontation to pummel India instead. Beijing emerges with its status enhanced, the only country that can take on Trump.The difference in approach stings partly because Russian energy is not quite as important to India as some might think. The ratings agency ICRA estimates that India saved only $3.8 billion last fiscal year thanks to Russian oil — compare that to the $242 billion it spent on crude imports overall. Nor does all that $3.8 billion filter down to ordinary citizens. A significant proportion of refined oil is re-exported, reducing consumers’ bills in the rest of the world.Given the narrowing discount on Russian oil, most in New Delhi assumed a shift from to other sources — including US supplies — would come sooner rather than later. But they didn’t think there was any tearing rush; perhaps it would be baked into a broader deal between India and the US. That assumption was clearly unwise, and born of overconfidence. Making the shift now — thanks to the US president — will have serious political costs. Modi’s opponents, recognizing a rare opportunity to outflank him on nationalism, have accused him of being weak on Trump. A tide of anti-Americanism runs deep and strong among the intellectual class, and the unfair singling out of India has brought it all to the surface.When surrounded by intemperate voices declaring that national pride is at stake, it is hard for most leaders to take rational decisions. The government bears some responsibility for making relatively small gains from the Russia trade sound like a matter of vital national interest. It will now have to figure out a way to gracefully turn that message around. Others unfriendly to the US are also moving in to take advantage of New Delhi’s discomfiture. President Luiz Inacio Lula da Silva of Brazil — which has been hit by tariffs that are transparently political in nature — has called Modi to pitch a joint front against Trump. It has been reported that senior officials are to travel to Moscow shortly; and the prime minister himself may go to China for a meeting of the Beijing-dominated Shanghai Cooperation Organization.A trip by Modi to China would have been unthinkable just a year or so ago; he has not visited once in seven years. But it isn’t surprising, either, given how China appears to be able to shake off attacks that India has to endure. The only country that Trump can’t bully might also be the only source of protection against him.(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)