Indian Council of World Affairs

 

Unidentified Speaker: Good afternoon, ladies and gentlemen. Thank you all for joining us this afternoon. May I request you all to kindly put your phones on silent mode, please. Thank you. On behalf of the Indian Council of World Affairs, it gives me great pleasure to welcome you all to this discussion on the theme One Year of Trump 2.0: A Reset or Rift in America First Policy with our panel of very eminent scholars.

 

The discussion will be chaired and moderated by Professor C. Raja Mohan, Distinguished Professor at the Motwani Jadeja Institute of American Studies, Jindal Global University. Our other panelists are Mr. Dinakar Peri, Fellow, Security Studies Program at Carnegie India, who's also joined us. Dr. Michael Kugelman, Resident Senior Fellow, South Asia at the Atlantic Council. Professor K.P. Vijayalakshmi, Head of Department of Geopolitics and International Relations at Manipal Academy of Higher Education and Dr. Pankhuri Gaur, Assistant Professor at the Research and Information System for Developing Countries.

 

The discussion will be followed by a question and answer session, which would be moderated by the Chair. May I now request Professor Rajamohan to make his opening remarks and conduct the proceedings. Thank you.

Raja Mohan: So, thank you and welcome all of you for this afternoon's discussion. It was not easy getting here this afternoon, I think massive traffic, so really welcome to all of you and we have two online participants. One of the great things about today's subject is, it doesn't need any introduction. For the last one year, all that we've been talking about, writing about, reflecting about has been the extraordinary turbulence that President Trump has triggered in the second term of his administration. So one year looks almost like a hundred years of the kind of changes, even as we speak, there are more changes probably unfolding.

 

So I won't go too much into the detail, I would also urge four panelists to take some knowledge of the subject granted because I think every one of us here is engaged with those issues in our own way. So therefore come straight to the specific issues that you want to talk about for ten minutes each. So I would just in the initial opening of the panel, I would just say four things.

 

One, I think the change is both in style and substance. So while many of the policy issues we talk about, Trump today is unbound, unconstrained in a manner that no previous U.S. president has been, either by domestic political pressures, his own party, or by the permanent foreign policy establishment. So this is really a unique moment in U.S. history. So we've got to see how exactly this will unfold. But the style, personalized, almost unilaterally and without being constrained by either the legislature, by his political party, or by the media, is quite an amazing moment in America's history if you look at America on its own.

 

Second, I think the relationships with both friends and allies on one side and adversaries, both are up for change. So it's not that he's only being nasty to his enemies, he's actually being nicer to his enemies, if you will, the only two countries he's shown some respect and deference, Russia and China, but the rest of it is pretty equal opportunity offender in a sense, doing things and saying things which would offend you. But here I think it's important to understand there's nothing personal here. I think it's easy to do psychoanalysis, all the psychobabble that is going on about Trump. I think it is about policies that he and his base believe in and what effect does it have on the others?

 

So when people in India think H-1B is being targeted at us, look, the argument is against immigration. But as one of the largest recent immigrant communities, which is most visible and rich within the United States, you get affected by it. But I don't think we should treat it as something directed at India. But it is a question of how do you deal with immigration in a society. I think that was the big issue. So, therefore, I think you've got to focus on what is changing within the U.S. And the U.S. perspectives on the rest of the world, I think that is the fundamental change that is taking place.

 

And here, I think Trump has channeled a longstanding resentment on immigration, against alliances, against globalization, and against multilateral institutions. So that's what we are seeing today, that he's willing to take a rupture with NATO when he was asked by the New York Times a few days ago, would there be a choice between grabbing Greenland and losing NATO? He said, yeah, that's a choice he'll consider. So it's not as if he's being deterred by the fear of losing NATO. So I think you've got to understand the scale and the magnitude of the change that he's bringing to the fore.

 

The fourth issue, and I think on all the multilateral institutions, if you thought WTO was God, Trump doesn't think so. He doesn't think it's really a man-made instrument, and if it doesn't work for the United States, they're going to tear it apart. And he's shown you last one year that there's nothing sacrosanct about the WTO, or for that matter, the United Nations. But there was always a strain in U.S. politics that was critical of the U.N. although it was the U.S. that largely led the creation of the U.N., there was always a lot of skepticism, especially in the Republican Party. And today, Trump has taken it to the next step of actually creating a new board of peace, which I believe the charter will be signed tomorrow, if all goes well, in Davos.

 

So you have actually a boldness, you can call it reckless, you can call it stupid, you can call it ambitious, that the scale of the change that is being proposed, I think, is truly immense. Therefore, for us, I think, it should not be narrowly India-U.S. I think we need to do more to understand the U.S., the sources of change within the U.S., and how this is going to play out. So I'm sure it'll be a great discussion this afternoon, and we have four great experts.

 

We have K.P. Vijayalakshmi, old friend, he is coming from Manipal. Michael Kugelman, who is in Davos, I believe, otherwise it would have been rather early morning for him in Washington, where he lives. We have Dinakar Peri from Carnegie, India, and then we have Pankhuri Gaur. So what I would say is, we'll start with Dinakar, but each one of us will go 10 minutes each. So keep it sharp and short, then we can have more time for the question and answers. I'll stop here, and we'll take. Yeah, I think you can see more clearly.

 

Dinakar Peri: Good afternoon, everyone. Firstly, sorry, as sir mentioned, a bit of a crazy traffic and too many events happening in Delhi at this time. So, literally running from one event to the other. On that note, thank you for having me. Thank you, Siddhi. And good to be back at ICWA again.

 

Very quickly, I'll try to probably wind up much before we can have a discussion. Always better to chat than a monologue. On that note, I mean, we all know, as I said, we have been following very, very closely what's been happening. So, trade remains the biggest tumbling block. And to say trade would be unfair because it's not an issue of trade. It's not about tariff. It's about tariff. How do you appease Trump? That's the issue falls apart on May 10th. I mean, just go back. April, we all were told the deal is ready. A framework was agreed. Concessions made, India made a lot of concessions. Even agricultural, broadly. Contours agreed upon. Things were there. And suddenly, as soon as that happens, May 10th, everything collapses. I mean, that one tweet. No acknowledgement from India. India saying, okay, not mediated by the U.S. and everything goes apart.

 

And some of the revelations came in the last few weeks of what happened in the back end. That all adds up to that. But the point is, it's not just about trade. The issue is elsewhere. So, even now, the question is, how do you fix that problem? So, in all that, now coming to defence. In all the larger issue, defence has been the most steady pillar right now. For the last one year, defence has been holding the ground. Why? Just look at all the engagements happening. Exercises, engagements, even some amount of military purchases. Some of the emergency procurements done post-Op Sindoor. One of the biggest ones, since the Javelin anti-tank guided missiles, for example.

 

India has not bought the system before. Tested, tried. Lot of iterations have happened. India actually went and signed the contract recently. Small volume, but nonetheless, new induction for the Indian Army. And that has happened now. Some support packages for the MS-60 Romeos. And there are a whole series of them. So, all that has happened. I mean, that has not stopped. P-8 exchanges have happened. Major military exercises have happened. All of that, no break in that. Even the bigger deals, I mean, to dispel a couple of misnumbers, a lot has been written saying, big defence deals have been put on hold, which would be incorrect.

 

Why? Because these deals actually take long iterations. So, while this reflection was continuing, the teams were actually here, negotiated, went back. That back and forth has been happening. Again, P8I, the deal has been a case in point. There have been multiple visits back and forth. It's still not at a stage, where India can issue the letter of request to the U.S. There is a process. And bureaucracy is everywhere. It takes time. So that's actually going on too.

 

Again, one thing is mixed up in this has been the Stryker deal. The Stryker deal has not been held up because of this friction. It's been held up because of other reasons. The Stryker is the armored personnel carrier. Sorry, I get the defense flow go away. So the armored personnel carrier, which has been pitched by the U.S. to India as one of the co-development or co-production, not co-development, co-production rather. The MQ-9, the UAV's being one in the air domain, this for the land domain, land, sea, air. They wanted three co-production initiatives.

 

So the Stryker was there. Great, nice platform. But the problem was, or the issue was, it did not really fit the Indian Army requirements. Some negotiation happened assembling it in India by BML. A lot of discussion did happen. But the piles did occur in September 2024. The issue is it's not amphibious. It does not have an integrated javelin or ATG mounted on it. Among the key issues. So the deal is stuck because of that, not because of the issue with Trump or the trade deal. So, separating the two.

 

So all said and done, so that bit of engagement is going on. One quick point on the Quad. Again, you can interpret Quad in so many ways now because it has everything under the umbrella. You name it, you name a sector, it is under Quad. But all said and done, there is still optimism. The summit has not happened, but there is still optimism all over the place and rightly so because, one, U.S. does not put any money in the Quad, the safest bet. Two, the partner countries are actually putting in money to build capacities in their own spheres of their domain. So it's actually good for the U.S., burden sharing, as the NSS says and Trump has been repeating.

 

So in all these things, the defense has been a steady anchor. But that said, will we sign big deals? That's a question I keep getting. I don't think so. We'll reach the process. We'll complete the process. Signing is a political call. See, big-ticket deals, always signing is a political call. When, how, in what format. So that will probably hold till we get a trade deal in shape or make a trade-off. That we'll have to wait and watch. But let's see.

 

But that said, from the purely defence or the security cooperation, how does it go? In two minutes, I'll wind it up. We can say it's a short-term thing. Probably, yes. We can hazard a guess saying, okay, three more years, Trump goes away, things will go back. But the question is, will they? See, Trump is not a standalone thing, he is the outcome of a larger trend, which is happening globally. It just happens that he is the president of the most powerful country on the planet, things are where they are.

 

So, who will come after Trump? The system will not relapse fully. Once the new norm is set, it doesn't go back entirely. It's somewhere in between. So, how do we hedge for our defence? We'll have to wait and watch. One quick point on the dependency, what we may have. For example, India has for a very long time did not buy any offensive military platforms from the U.S. Only the Apaches and the M777 howitzers, Apache heavy attack helicopter and the M777 ultra-light howitzers. They two are the first offensive firepower India actually bought from the U.S. And now we have a whole series of them. India has still shied away from buying a fighter jet from the U.S.

 

That said, now there is a new reality to it. In 10 years or 15 years from now, about half of the Indian air force or at least 40% fighter fleet will be powered by the American engine. So, that's a lot of dependency. You can see it positively, you can see it the other way. But we don't know. We'll have to wait and watch. Your LCAs, the light combat aircraft, Mark 1, Mark 1 Alpha, Mark 2. All GE engines, General Electric, F404, F414. Types, nonetheless, same company, American engine. It will also power your 5th generation futuristic AMCA, India's 5th generation fighter aircraft. The initial lot will all be with American engines.

 

So, that's about roughly close to 400 fighter jets. So, that's a lot. So, we are deepening the engagement. So, now it's a question of a bit of turbulence and a reality check. I'll leave it there. We can discuss it further. Thank you.

 

Raja Mohan: Thank you, Dinakar. As you all know, Dinakar has been reporting on defence for the Hindu for many years. So, he's really very knowledgeable. Thanks for that introduction. So, I'm just checking if Michael is online. Michael Kugel, are you online?

 

Michael Kugelman: Yes, I am. Yeah. Hopefully, I'm audible.

Raja Mohan: Thanks, Michael. So, 10 minutes, if you want to tell us. You've written so much in the last few weeks on India, U.S., U.S. and South Asia. A whole lot of stuff. So, just give us your view in 10 minutes.

 

Michael Kugelman: Yeah, thank you very much. Sorry for my camera being off. I'm at Davos, and the signal, interestingly, is rather weak. So, I'm keeping my video off to maximize the signal. Hopefully, I'll be audible. So, I thought I'd just speak for a few minutes about this question I think many of us have been considering. And that is, what is driving U.S. foreign policy in Trump 2.0? And I would argue that it comes down to three Ps. And the first one is policy itself. The President Trump's foreign policy is a robustly, if not aggressively commercial and transactional approach. It's much more aggressive than it was during Trump's first term.

 

So what this means is that U.S. foreign policy now is all about taking steps to ensure U.S. economic interests are served and to ensure that U.S. economic interests are not undermined. This is why the signature priorities of Trump's foreign policy include imposing tariffs and pursuing critical minerals with little regard for the impact on traditional U.S. strategic interests and critical partnerships. And so consequently, this brings some unusual, if not outright bizarre outcomes. So as we all know, a close U.S. partner like India had been saddled with 50% tariffs because of a trade balance in India's favor and because India was not willing to give in to all of the U.S. side's demands in trade talks.

 

The President, of course, has threatened to seize Greenland due to its critical minerals, some of other things. The U.S. attacked Venezuela to arrest Maduro because of his policies on drugs and energy and the perceived impact on the U.S. The second key that I would highlight that drives and has driven Trump's foreign policy in his second term is his personality. I mean, there's been a lot of discussion about this. I mean, his personality is one that tends to disregard the importance of recent history and the importance of strategic interests. And it was really much more focused on this question of what have you done for me lately?

 

And it's also driven to be very candid, and we know this to be the case. His personality is driven by a deep need for recognition, validation, praise. And so this brings more strange and unusual outcomes. Threats are made to the NATO alliance. Foreign leaders looking to get in Trump's good graces flatter him, while those that don't flatter him upset him.

 

A third P that I'll highlight that helps explain the U.S. foreign policy in the second Trump administration, is personnel. So unlike during his first term, the President has filled his administration with loyalists, which I think has had the effect of minimizing the chances of pushback against his foreign policies and limiting checks and balances on his foreign policies. And so this ensures that the most radical, hard-line elements of his foreign policy plan will not be reined in, as happened in some cases during his first term.

 

Also, and I think this is especially important, U.S. foreign policy is now being driven by the White House, not by the bureaucracy within the interagency process. And the White House, those within the White House driving foreign policy includes a small group of powerful hard-liners, some of whom, maybe many of whom are not experts on foreign policy. And the National Security Council has been scaled back dramatically, as you all know. So in terms of consequences, those that truly understand the importance of U.S. strategic interests inside the U.S. government, and those that understand and care about the context about U.S. relationships with important partners, like India, have been marginalized. And they are not currently in a position to drive or even impact policy.

 

Now, if we were to look forward, and if mid-level officials and experts in the U.S. government bureaucracy within the broader interagency community are eventually given more agency to impact or lead foreign policy, then you might see a moderation in Trump's foreign policies, including better efforts to get the U.S.-India relationship back on track.

 

Before I conclude, I was asked to talk a bit about how people here are not in the U.S. now, how those in the U.S. see Trump's foreign policy. Obviously, I don't want to generalize a lot of different views. Naturally, his critics don't like it at all. His supporters generally like it. On Capitol Hill, of course, many Democrats have been critical. Some Republicans likely oppose some, if not many, of his policy, but they've largely stayed quiet. I would argue that there are possible domestic political risks for Trump at home regarding how some of his base has reacted to and might react over the course of this year to his foreign policy, keeping midterm elections in November in mind.

 

So, for example, there's some farmers in the red states, in the Republican states of the Midwest and the Plains that have been hurt by Trump's dismantling of U.S. aid and foreign assistance because many of these farmers were growing and producing crops that had been part of U.S. food assistance programs. That's one thing. Second, many members of Trump's base bought into and supported his vow not to get involved in military event tourism, but then came Venezuela and who knows what could happen in Iran down the road and perhaps other places, too.

 

And finally, the tariff policies that President Trump has brought out have not damaged the U.S. economy in a big way, but we have seen some indications of higher economic stress in the U.S., particularly when it comes to inflation and food inflation. Many folks going to the grocery stores have seen higher prices. I think that's something that could have political impacts for him as well. So my view is that his foreign policy is dramatically different and radical as it is. Something that he believes in could be politically costly for him as we get to the midterm elections. So that remains to be seen. I'll conclude there. Thank you.

Raja Mohan: Thanks, Michael, for that very precise presentation. And I think the three Ps are quite useful to, for us, I think, who are outside to think through, because I think there is a general tendency to think of U.S. as a black box, as a single coherent entity and that actually how the internal changes and the structures actually matter and how they're changing within and what effect they have on U.S. external relations. So I'll now turn to Dr. Vijayalakshmi, Professor HGIR, can you just take 10 minutes and, yeah, and then we have an interesting audience here.

P Vijayalakshmi: Thanks, Raja, and it's been great to be part of this very eminent panel. I speak a little slowly, but I will still stick to my time because a lot has already been said. I do agree with Michael, who's also another friend, and three Ps, I read some pieces in Foreign Affairs, I think, which talks about also personality problems, etc., but three Ps about sums it up. But really, if you look at some of the things, here's a sampling, I thought, Raja, that we should look at what has Trump's leadership got in the first year, to the world. One is the NATO allies have actually agreed to a record increase in defence spending.

 

Secondly, our allies have suffered a direct U.S. attack, at least on three mutual sides, and that's something, I thought. And Gaza has a peace plan, maybe it's very fragile, maybe the peace board is still taking place, but it has a plan. And of course…

 
Raja Mohan: Vijaya, can you? Just call it. It's internet. The demands of the pandemic days.

 
P Vijayalakshmi: Hello, can you hear me now?

 
Raja Mohan: We just lost you for a few, or a minute or so.

 
P Vijayalakshmi: Yeah, I'm very sorry about that. Maybe I'll also do what Michael did, and take off my video because these days it's a bit of a problem. So anyway, to quickly tell you that U.S. national security strategy warns of Europe's civilizational erasure. These are some things that one needs to keep in mind as a background to what we're going to discuss today. But if you look at this, there's a lot of unfinished business that's still going on. One is that whether he's going to run Venezuela, that's a problem. The details are not available.

 

Then the continuation of the Ukrainian War and what's going to come out of that, whether the U.S. peace efforts and Putin's reactions, etc. And China's mobilization of naval air and missile forces around Taiwan. Again, that's another area that I think we should. And of course, you're looking at Iranian protests really becoming really big. And it's as much as Gen Z, etc. So there's a lot of work. So if you look at the second P that might be talked about personality-wise, he likes to play to win, win every day. So I believe that that. But I think that really makes for a very interesting idea of Trump.

 

The second major point I want to address is, is Trump just President Trump and his administration and what he leads? Or is there a Trumpism and what is a Trump doctor? I think these are three frameworks that one can usefully use to understand how best we're going to predict what the next few years are going to be like. The first thing that I noticed about trade, and Dinakar has talked about it already, but the operating logic to which American power is exercised has now changed, according to me. Because the core objectives of U.S. foreign policy has not really changed that much.

 

They seek primacy, they seek deterrence and they seek leverage. It's the operational logic which has changed. Then even burden sharing and the security guarantees, is that a credibility gap? Are we now not able to trust the United States as per the allies, etc.? Is this just a reframing in conditional terms? So how do we understand reframing and navigate the reframing to recalibrate our own interests?

 

The third is the dismantling of the so-called rules-based order. Is that a reality? Or is it just that the American position now is stripped of a kind of value versus interest debate and talks only of interests that too American interests and American interests first? I just want to mention this point about how it influences the global system. Because I think America is still the most powerful actor in the system. But there is now a certain weakening in the confidence of others, in the predictability and institutional anchoring of that power.

 

Now, there's a domestic dimension to it. Michael alluded to it very briefly. But I think somebody who's willing to push the institutional norms, whether you want to call it the third term question, or what will happen in the midterm between the Democrats, and this can go on. But institutional norms, whether you can anchor that to the foreign policy, or should we think about a different? So what does it produce from the system?

 

According to me, three things, and I'll wind up there. First is, it's produced a lot of anticipatory hedging by all. Europeans and India, Asians, everyone is talking about strategic autonomy and diversification of security relationships. And the world is also not just being multipolar or becoming multipolar because of American power has collapsed, but because states now expect a certain volatility from Washington. And that's, I think, important. But what is driving this is ideological, and that is not just a transactional populism as we are led to believe that this is a deal. I think it is a more stronger nationalist belief system, which is where we might think of how will Trumpism look like after President Trump falls, or if he leaves.

 

Fourth and the final question about the third term, the issue is less about constitutional mechanics and more about its norms, erosion, and the institutional limits being pushed. So I think there is a huge amount of change that we all have to think about, but I think it's producing some very interesting behavior from the rest of the state system. And I'll leave it there. But on India and the U.S., I'm willing to take questions because there's quite a bit that I can talk about, but we'll talk about it in the Q&A. Thank you very much, Raja.

 
Raja Mohan: Thanks, Vijay. We turn to last speaker, not least, but Pankhuri you have 10 minutes.

 

Pankhuri Gaur: I hope I can operate the presentation from here, right?

 
Raja Mohan: Don't read from the thing. Just make the big points.

 

Pankhuri Gaur: Yes, of course. But firstly, I would like to thank ICWA for inviting me for such an important topic. And my fellow panelists have talked about all the strategic, defensive, everything there. But I would like to focus on the economic aspect that we are dealing with, with Trump or tariff 2.0 we are focusing on. So, of course, we know that tariff hikes, they have a dampening effect on the economy. And it is expected or has estimated that the global trade can be reduced from around 5.5% to around 8.5%. We are seeing the reconfiguration of supply chains where China is exporting to the U.S. through Mexico and Southeast Asia.

 

We are seeing the legality of these Trump tariffs or the increase in the tariffs has been questioned in the Supreme Court, and we are still waiting the decision. Of course, then continuous announcements with respect to Greenland, with respect to Iran, with respect to Russia, again for 500%. So all these are the new, or what do you call, the basis of the background of what I am trying to present further, and what would be important for India and where India is having an advantage, and what should be India's strategies for future.

 

So the main objective is for increasing the tariff is the nationalist approach that is taken by the United States. They have sweeping tariffs named unilateral-based or reciprocal tariffs. There have been successive stages from April, July, and then again this year as well they are focusing, they have announced a lot of either as a threat or increase their tariffs for two different countries, which is not the case that it has also happened in the previous regime.

 

Trump 1, we have seen U.S. and China trade wars. We have seen tariffs on steel and aluminum under the America First policy. We have seen renegotiations in NAFTA, then the new came up with the USMCA. We have also seen these kind of threats in election campaigns. And of course, in 2017, they have backed out from TPP as well. So the nationalist approaches was there previously as well. And to support this idea, they have a lot of domestic laws. We have IAAPA, we have section, of course, everybody must be knowing. So I'll skip these points and then focus on that, what exactly, what is the justification of these increasing in tariff?

 

So major focus of U.S. is that the increasing trade deficit. And that's true. Then you can see that U.S.'s trade deficit has increased from $484 billion in 2002 to mostly around $1.4 trillion in 2024. So this is the graph, which we can see. But there we have to see that this trade deficit is also growing at 5% per annum. It has increased three times. And we can also see that U.S. is one of the least trade-dependent economies, where the trade openness, as in the trade as a percentage of GDP, for the United States is only around 25% in 2024. Whereas countries like Malaysia, it's around 137%. Mexico, also 75%. South Africa, 61%. And others also.

 

So trade deficit, of course, has an impact on your CAD. It has an impact on your forex. So basically, all the net outflows of your resources from the country, trade deficit is happening there. So basically, he is justifiable in increasing the tariff based on the trade deficit that they are facing. And then we see the major contributors of the trade deficit of the United States. You can see there are two centers that are coming up.

 

One center, we have the four big countries, or you can say the China, which is having 31% of the total deficit contribution, followed by Mexico, 23%, EU, and Canada. And then there are other countries. This is basically the top 10 contributors. So you have Japan, South Korea, and India is like the 10th largest. It's nearly 3.7% of their total trade deficit in 2024. But then you see the tariffs on these countries based on the trade deficit that they are providing to the United States, you see a contrast.

 

So India, where the trade deficit is nearly 3.7%, we are being tariffed around 50%. In case of European Union, it's around 19.6% trade tariff. We're only 15%. And the rest, of course, we can see from this graph. And the other thing is also, this is basically for all the countries I have tried to match, but given the constraint of the graph. So around 66% are being tariffed at 15%. And I think the rest are at 10%. So, as Chair mentioned, there is no ally or there is no adversaries. So Philippines is also being taxed. EU is also taxed. Even though the trade deficit with Philippines is different from what is happening or what is the trade deficit with the European Union.

 

So what exactly are we focusing on? So the increasing tariff, they also… So it's not that a particular importer has a profit margin of around 15% to 20%, where the tariff increase can be reduced, as in the profit margin can be reduced, and you can sell into the United States. It's not the case. The profit margin is merely around 5%, or maybe lesser than that. And secondly, there are challenges as well for the execution. Though, he has mentioned that he'll be doing 90 deals in 90 days, but we have seen that within the deadline, it's only the one deal that came up. And of course, the prevalence of MNF tariff within the WTO is very much important in such a scenario.

 

Now, when we are talking about India specifically, so the importance of United States and India, largest trade exporter, of course, among the top 10 importers. And India's export to U.S. has been growing at around 8.1% per annum from 2017 to 2024. This is how our trade surplus is increasing. So exports, imports, the difference in between these two lines is your trade deficit. So in 2024, it's around $40 billion where India is right now placed. So there's a sharp increase specifically when you can see in 2009 to 2013, and 2019 to 2021.

 

Now, within the trade surplus that India has, when we can focus, it's only out of 21 broad sectors in trade. 18 sectors are there where India has trade surplus. And only three sectors are where India has trade deficit. The red ones are showing the trade deficit that India as in the trade surplus of U.S. versus trade surplus of India with the green ones. And it is not specific to the broad sectors. You can see it at chapter level. At any different levels, we can mention at technology, at technology-embedded goods.

 

So when we are talking about technology-intensive products, it's only the primary sector where U.S. has a trade surplus. Rest, when we are talking about low technology, medium, high, everywhere, India has a trade surplus with U.S. Similarly, in the end-user level also. So only the primary sector. Rest, in the semi-finished, parts and components, capital goods, consumer goods, everywhere, India has trade surplus with U.S. Even though, when we are talking about theories, it says that the developed countries exports more manufacturing goods versus the developing countries, which exports more primary goods. It is just the opposite.

 

So, I'll just take two minutes. So this is basically what I have tried to do is, month-wise, I have tried to see that what with all sectors is what we are exporting to the U.S., and how it has changed due to the tariff. So when you see the green bubbles, it's basically, as in the 85 number is the chapter number. So it's chapter-level analysis of Indian exports from 2005 to 2024. So basically, July 2005, and July 2024. What is the growth? So the green ones are showing the growth, and the red bubbles are showing the de-growth in that particular sector. So in July, you have 28 negatives, which is increased to 54 negatives in August, and September, 79. So slowly, we are seeing that at chapter-level also, we are facing a de-growth in a lot of sectors vis-à-vis, in the same month, last year.

 

So India has basically kind of two options. One is the reconciliation, where we are focusing on the Mission 500. We are targeting $500 billion deal as a two-way trade by 2030, and where U.S. has market access in India in areas like edible fruits, nuts, of course, almonds, soya bean, beverages, and spirits, and of course, the mining sector. With the India-U.S. compact also, we are talking cooperation in trade and technology. And there is a RIA study which has said that if this is fruitful, as in it's in the process, but it is projected that after Mission 500, India's export would be around 20%, import around 28%, and the trade balance as it would decrease to around $25 billion in the middle one. So, of course, there are areas where there is inter-regional trade. We can focus both India and U.S.

 

And the second one is to retaliate, in the sense the areas where U.S. has an advantage in all these areas, agriculture, so fruits and nuts, minerals. So India can retaliate. But of course, we are focusing right now on diversification of trade. And we are working through different regional groupings. We already have. And of course, working on the new trade FTAs with developed countries like EFTA, Australia. We are coming up in New Zealand and EU, the mother of all deals that we are talking about. And of course, we are working on the intra-global south that is focused. So this is the key takeaways, which I can focus on later. Thank you.

 
Raja Mohan: Thank you, Pankhuri. Thank you so much. I think our four panelists have covered a lot of ground. So we have about 40 minutes or so for a discussion. So what I'll do is I'll take three questions at a time and then go to the panelists. And of course, both our online panelists have been very generous with their time. So if there's anything for them you want to ask, so make it clear in your questions right at the beginning. So let's keep the questions short and sweet so that we can get more people to participate in the discussion. Sir, would you want to usher? Here, Dr. Ambassador Sajjanhar.

 

Ashok Sajjanhar: Yeah, thank you very much, Raja, and thank you to all the panelists for their very concise and focused presentations. So I have two questions, one to Michael Kugelman. Michael, since you are maybe not currently, but you are based in Washington, D.C., you are in the United States, could you give a sense of what is the measure, what is the level of support for India in the U.S. circles? Because earlier, it was thought whether it is the Congress, we have the highest, we have the largest caucus in the House of Representatives, in the Senate, amongst the business people, and in people-to-people contact. But right now, you see so many very hostile and adversarial comments being made from the United States. So at different levels, business, etc., what is the sort of support that you see there?

 

And my second question to Dinakar, to you, would be, do you see some sort of a measure of pushback against Mr. Trump, for all the policies that he's been following for the last one year, whether it is domestically, from the Congress, from the courts, we have seen something. But that has not really amounted to much. And also at the global level, what he has done to South Africa as far as G20 is concerned, expelling them from there, and all the other shenanigans that we have seen emanating from him. Do you see globally and domestically, because I'm sure there is a great deal of unhappiness, but is it resulting in some sort of a pushback against him?

 
Raja Mohan: Thank you. I think the level of support in the US domestic and the potential for pushback. Dr. Uma, do you want to?

 

Uma: First, I would like to thank all the speakers for wonderful presentations. And I think we've all learned a lot from all the presentations. So I just wanted to know, everyone talks about this fundamental shift which is happening in the U.S. domestic politics. But I just wanted to ask you, what are the sources of this domestic discontent and the subsequent conduct by the administration? I mean, it's all very well to say there is a fundamental shift in domestic politics. But what exactly are the sources of this domestic discontent?

 
Raja Mohan: Okay, just pass it on to you. Please introduce yourself.

 

Rahul Tripathi: Yeah, I'm Rahul Tripathi from Goa University. Very briefly, my question is addressed to Michael and Professor Raja Mohan himself, if you could. How does he look at South Asia as a region in terms of whatever he has seen and whatever he has done? So if you could throw some light on that.

 
Raja Mohan: Okay. We'll start with Michael. Michael, I think you're the South Asia man, really, at this point, globally. So just, you want to start?

 

Michael Kugelman: Sure. Thank you for that. So to the first question about the level of support for India and U.S. circles, I would argue that the sentiment coming from the White House is actually an anomaly. I would argue that across official Washington in terms of policymakers, Capitol Hill, analytical community, think tanks, all of that, it's still very supportive of partnership with India and a sense of concern and alarm about the direction of the U.S.-India relationship.

 

As I said before, it's the White House that's driving foreign policy or policy toward India. So this is why we have a crisis in ties with India, because those that appear to be least inclined to maintain partnership now are in control of the policy toward India. But if you talk to mid-level officials, the bureaucrats within the State Department BOD, across the interagency community, it's unusual in my experience and I know others to come across people that agree with what the White House has been doing on policy toward India.

 

And looking at Capitol Hill, I sort of alluded to this before, I would argue that across the board, including among Republicans on both the House and Senate, continued strong desire for partnership with India, but they're concerned, and I would say afraid, to publicly voice their discontents with the direction of the White House policy toward India. It's true, as the questioner noted, that we are seeing some really ugly rhetoric, outright racist sentiment coming from some members of the Trump base, but I wouldn't want to overgeneralize.

 

I'd argue that there are members of the MAGA base that are very pro-India and are not at all critical of India or Indian-Americans or whatever the case might be, but unfortunately there are strong critics of the MAGA base that have been very critical of India and it certainly doesn't help the relationship. But the bottom line, to answer your question, I would argue that the broader ecosystem in Washington, when it comes to how India is perceived and goals for the partnership, quite similar to how they've been over the last few decades, when it's just the White House that has been the anomaly.

 

And then for the last question, I guess the other one that was directed to me, I don't know if that was meant to refer to how Trump looks at South Asia or how I look at it. In terms of how Trump looks at it, he doesn't really look at it at all. He doesn't look at the world in that way. And to the extent that he looks at South Asia, he looks at it through the lens of U.S. economic interest and trade interest. And this is why four of the eight South Asian countries received tariffs, India, Pakistan, Sri Lanka, and Bangladesh. I think if he looks at the region through the lens of trade, he does not look at it through the lens of geopolitical competition, at least not at this point.

 

Very briefly, in terms of how I look at South Asia, it's fairly best that I say that for another day. But I think that this is a region that, in the previous administration, had been grouped into this broader sense of Indo-Pacific. But the Trump administration doesn't really use the term Indo-Pacific that much, which again gets to this issue that President Trump doesn't really look at South Asia through that lens. And to the extent that he looks at it, he looks at it through this very commercial transactional focus lens that revolves around trade and tariff policies flow from that. Thank you.

 
Raja Mohan: Okay. Dinakar, you want to speak on the pushback?

 

Dinakar Peri: So one indicator in the last two days, the U.S. stock market has seen a lot of downturn, and dollar actually fell from the basket of currencies almost 1%. So if that's an indicator, just quit this thing. What happens...

 
Raja Mohan: Economic and financial...

 

Dinakar Peri: Yeah. That will actually have an impact. Because end of the day what happens if you use Twitter chat or for example, on X you will see there is a lot happening, but that will not translate into the voice on the ground of the average American on the ground. That will only happen when the economic things actually go bad, and that takes a couple of cycles, a few quarters. Bond market also fell in the last few days, but how the trend is we don't know. One, that's the trade part of it.

 

From the geopolitical sense, for example, Israel today said they will support the Board of Peace but then Norway said, we will stay away. France is somewhere in that bracket again. So probably that, the Board of Peace and Greenland can actually be the inflection points in a way to turn the mood around. Probably looks so because actually the crisis has hit home now for Europe in so many ways.

 
Raja Mohan: Vijaya, you want to just say a brief word on the sources of domestic discontent? Are you there? Okay. I think, look. Just a word on the domestic discontent, sources of domestic discontent.

 
P Vijayalakshmi: Yeah, okay. Thanks so much. And Sruti, I wanted to thank her also for setting this up. I think it's a fabulous idea. Well, two things, what I noticed was that the first time when Trump got elected, we were looking at public attention, at least, more or less on the support of low-income families which had been affected by...

 
Raja Mohan: Okay, I think till Vijaya comes back, let me say that, look, I think a problem has been we've not paid attention to U.S. domestic politics. We tend to take it as a single lump. And most of us deal with the U.S. on foreign policy or trade on a purely bilateral basis. But I think what's happened in the last 20-odd years, Vijaya, let me finish and I'll come back to you, which is really attitude to trade have changed. Because a large section of the people have not benefited from globalization. And as it happens, I mean, they might not be the largest number, but how they vote in the Midwest has had an effect on the election outcomes. So it is a small but consequential section of the American white working class that felt globalization has not affected them.

 

Second, I think the immigration issue, I mean, if you see surging of outsiders in your midst, including brown faces, black faces, you name it, in a short period of time, I think it's bound to produce reaction. Just as our government talks about foreigners, outsiders, I think the U.S., as a society of immigrants, seemed far less concerned about immigration. But today it is. I mean, I think if you look at historically, there have been waves of anti-immigration sentiment through the U.S. history. So I think we're going through another phase.

 

I think on the alliances, again, the attitude to alliances, even if you ask our liberal friends who are conducting polls, there's American public still supports the alliances. But the fact is a critical section thinks allies are free riders, America is being dragged into wars, we shouldn't have them. So these are domestic arguments, which are played out into foreign policy and I would say that is the real change that is taking place. And I think like here, politics adapts to circumstances. But I think we've historically taken U.S. foreign policy as some kind of a grand design with no connection to its domestic politics. But today I think the domestic politics is far more consequential. Vijaya, do you want to come in quickly?

 
P Vijayalakshmi: Yeah, so what I was saying was that if the economic future of the United States is shaped primarily by the support of these high-tech industries to the president, the Rust Belt would benefit very little from that. But yet we're seeing this coalition and that's a real source of this president's power. And I think that is a shift that we need to make sense of because if you look at it, cutting spending on Medicaid, food assistance programs, etc., and what he said about the big beautiful bill, the cuts to Medicaid programs will definitely affect those people in rural areas just as globalization anger was there.

 

But yet they are making up a large portion of Trump supporters and we need to understand this source as a very important ideological principles of populist politics without which the voter demographic will look very different. Then the other important thing is to counter-offer of Trump administration for cheap labor coming from abroad. I think more than just immigration and the brown phase, if you decode that, I agree with you, but it's the cheap labor, we are being set up because we are not getting jobs, they are getting the jobs at a much lower cost.

 

So there is a nationalistic support for this type of transactionalism, if you like, or this nationalism or America First, which conveys to me a new religiosity or a coining of the purpose of American life, American dream, etc. So I think that is one. So this profound implications of this is that America First policy will change its relationship with not only just any other country, but even with traditional allies. And therefore the source, we must look, again, I have been a voter of domestic politics shaping, and the evidence is so clear that domestic politics often intrudes and in fact explains and unpacks foreign policy decisions, even unpleasant, economically unfeasible decisions because of domestic politics and the coalition.

 

And therefore, will Trumpism outlast Trump? Yes, it might. Because it depends on the domestic coalitions at home. Thank you very much.

 
Raja Mohan: Thanks, Vijay. Next set of questions, anyone? Yeah, right at the back I see, yeah. Mehta, sir.

 

Mehta: Is Michael still there?

 
Raja Mohan: Yeah, I think so.

 

Mehta: Go ahead and ask the question. Michael, my question to you is, you forgot the fourth P, profit. Trump has very clearly pursued many of these agendas for personal profits, other than vanity and praise. Thank you.

 
Raja Mohan: Okay, anyone else? Yes, lady here. Why don't you stand up?

 

Stuti Gogoi: Thank you for the insight. My name is Stuti Gogoi. I'm a research intern here at the Council. I wanted to understand Trump 2.0 with respect to the evolving situation in Iran. So we've been talking about a possible regime change in Iran for quite some time. So is it imminent now, a regime change in Iran with the U.S. and Trump administration?

 
Raja Mohan: So you wanted someone here? Yes, please. Just here, in the front.

 

Aditya: Hi, I'm Aditya, PhD scholar from US Studies in SIH ANU. I have a question on India-U.S. relationship, how in one year of Trump, what India has achieved specifically? Because when we see about the operation Sindoor and other stuff, then how India has kept quiet on most of these issues, even though Trump is keeping up all the time on these issues. Then how India should figure out this all in one year at least?

 
Raja Mohan: Silence is golden sometimes. I'm just going to go to Michael. Michael, I'll come back to the next one. Michael, I mean, I'm shocking that no one has asked you about Pakistan. So let me ask you, when you said U.S. policy towards South Asia, if you go back to 2017, there was a South Asia policy, one of the first regional policies Trump announced in 2017, November, if I recall right. And that was really very India-first, anti-Pakistan type of policy. What accounts for the shift today to a focus on Pakistan? And of course, Indians, we go crazy every time Pakistan is mentioned, the fact that General Munir, Field Marshal Munir has been invited for lunch. So what has changed there?

 

I think many Indians are scratching their heads. I mean, what exactly Pakistan is giving the U.S. today or why is Pakistan so important today for Trump? Is it Middle East? Is it crypto? Is it resources? So maybe you can throw some light on that and also look at other issues that have come up on the profit motive, on Iran, on the future of India-U.S. relations.

 

Michael Kugelman: Yeah, sure. Thank you, Raja. Actually, I could start by answering your Pakistan-related question by also addressing the first question about the fourth P, the issue of profit. I had said earlier in my first P that the Trump administration takes a very rigidly commercial approach to foreign policy, and this is something that has benefited Pakistan, I would argue. Pakistan has been very effective in projecting itself to this administration as a useful partner when it comes to helping the U.S. capitalize on commercial opportunities that it seeks abroad, generally speaking, not just in Pakistan.

 

We all know that for many years, for several decades, Pakistani officials have pitched their critical minerals, but they didn't get many takers for, I think, a number of reasons that we could certainly identify easily. But it's different now, because the current president is fixated on critical minerals. He wants access to them, and he doesn't seem to mind if there are challenges in accessing them, as there certainly would be in Pakistan, given where they're located.

 

So I think that's one way to answer your question, Raja, that Pakistan has been able to get the administration's attention by pitching itself as a useful partner on critical minerals, but also something else that's of great interest to this administration in the global context, that being crypto. Pakistan, of course, had nothing going with crypto until, perhaps not coincidentally, soon after Trump's second inauguration, when the new Crypto Council was announced. Crypto still has not been legalized in Pakistan, and yet we're seeing agreements between Pakistan and members of Trump's family, and so forth, on crypto. So that's one reason.

 

I do think it's… this is the main reason why we've seen this resurgence in U.S.-Pakistan ties. But there are other factors, too. I think that, given the geopolitical moments, given everything that's happening in the Middle East, Pakistan has been seen by the White House as important and significant, because of its proximity to the Middle East, because of the close partnerships it has with the GCC states, and so on. So I think that's a factor, as well.

 

I do think, and I know this does not go down well in India, but I would argue that what happened in Operation Sindoor got the attention of the Trump administration, including several Indian planes were shot down, and I think in the multiple meetings that Pakistan's army chief had with President Trump, I'm quite sure that the army chief brought that up, and that probably impressed President Trump, to be quite honest.

 

In getting to the personality issue, my sense is that President Trump is drawn to leaders like him or those that want to be like him. He's drawn to power. He's drawn to strongmen. As seen in Amir, is all about that. So I think that gets to why we're seeing so much positive attention that Trump has lavished on Muneer. Final point and this has been in the open for quite some time Pakistan has fired some actually, let me describe this, effective lobbyists in Washington, which has helped Pakistan get access to Trump and perhaps help it get certain messages and narratives from the administration of Pakistan would like to hear.

 

On the other issues, I don't know, I don't have a clear list but we probably need a little bit of noise here. I think you mentioned this earlier, Roger, Trump sometimes seems to be more friendly to U.S. enemies than to U.S. partners. Iran is an exception. Trump has had a soft spot, seemingly, for Russia in the past, for China, even for North Korea. He's always been relentlessly hostile to Iran. I'm not going to make any predictions about the possibilities of U.S. military action in Iran or any type of U.S. efforts, but I think it's important to note that Trump has never seemed to take a conciliatory position toward Iran, and especially toward the regime there.

 

Final point on the question of India-U.S. ties, what has India achieved one year on, I do think it's important to make one quick point that tends to be overlooked. As bad of a state as the relationship is in now, we shouldn't forget that cooperation has continued over the last year. The U.S. and India launched a joint satellite last year. Military exercises have continued. The FBI in the U.S. has been cooperating with the U.S. to apprehend, cooperating with India to apprehend several individuals that India views as terrorists, as Palestinians.

 

So I think it's important that even with all the noise about the crisis, things have still happened, and so in that sense there have been achievements from India's perspective, that its interests have been served and it's been able to cooperate with the U.S. on a number of important initiatives. Thank you.

 
Raja Mohan: Thanks. We have a fifth P, pay to play. That's how the Washington lobbying works. Pankhuri, you want to say something on the profit issue briefly? When you talked about trade issues, so how much does it?

 

Pankhuri Gaur: So basically, as in the profit margin that I talked about in my presentation. So when we are talking about, or in the real terms, it's not that levying a 50% tariff on a particular country or a 10% tariff on a particular country overall. So different importers have different profit margins for it. It is very difficult for them to take that into account. Additionally, of course, there have been estimates that all the, right now, for Indian importers, Indian exporters as well, the tariff that has been imposed is…

 
Raja Mohan: Here we are talking about profit as a person. I mean, I think you have to show, that's the context in which…

 

Pankhuri Gaur: Right. So, of course, then I'm not talking about that traditionally or the trade perspective, but when there are threats of the European Union using trade bazooka and impacting U.S.'s services and specifically companies like Amazon, Netflix and Meta, then, of course, it will have an impact on their economy and then, of course, may change his perspective on Greenland.

 
Raja Mohan: Do you think we should keep silent or go back to the old habit of...

 

Dinakar Peri: No, no. Silence is golden. No, absolutely. You don't have to do tit for tat for everything. Whether it's military building or diplomatic stuff, sometimes you have to be asymmetric, so to say, and that actually works in diplomacy. And a split point on Pakistan, there's also the Iran angle and the Afghanistan angle as well. U.S. interest in reopening Bagram, Pakistan becomes... we know how critical it is. And also the staging of Iran itself, whether it's just bartering... there have been enough reports which said Pakistan was providing intelligence on Iran to the U.S. So all of that also adds up to what all has been offered to Trump's family as well. And what's been offered to the U.S. and Trump's family are two different things.

 
Raja Mohan: Vijaya, you want to come in on the India-U.S.? Any insights, briefly, and then...

 
P Vijayalakshmi: Yeah. I would just like to use an analytical framework or just a simple analysis. I think there was a lurking suspicion in this question of disappointment with Trump administration about what happened in the first year, etc. I would think that this is where I would argue that this is a period that represents India's strategic learning rather than just putting it into something else.

 

Secondly, I think India did not escalate. India did not retaliate. It adjusted. First, India exercised restraint. And what is really notable was that it absorbed pressure without public rupture. I think this is something we need to keep in mind. We don't say anything if we say something. No. We are absorbing pressure, and that's something significant. Second?

 
Raja Mohan: See, that's Gandhigiri. Passive resistance.

 
P Vijayalakshmi: Can you hear me?

 
Raja Mohan: Yeah, yeah. Quickly.

 
P Vijayalakshmi: Okay. So, the third is that we have sustained, even if I would say selective, engagement with Washington. So, therefore, I find that India is not thinking of equal distance or alignment at any cost. It is rehearsing strategic autonomy and the ability to work with a very powerful, volatile partner without becoming dependent on that partner's consistency. And I think that's really something we've learned. Thank you.

 
Raja Mohan: Thanks. That was good. So, next round of three questions. I see at the back, that lady. No, one before. Yeah. Some preference to ladies.

 

Anwesha Ghosh: Thank you, sir. Mr. Perry, you mentioned about Afghanistan as well as Bagram. So, my question is related to that. I'm Dr. Anwesha Ghosh, a fellow here. How realistic it is for Trump's idea to return back to Bagram considering that would require Taliban's consent and of course regional support and considering the history, how they left Bagram airbase in 2021. Thank you.

 
Raja Mohan: Next right behind you, yeah.

 

Zeeshan Ali: Thank you so much. I'm Zeeshan, a research intern here at the council. My question for the panel as a whole, Dr. Pankhuri's presentation highlighted that India is the 10th position at 3.7%, but it is being charged the most tariffs. So why is it exactly that we are being charged the most tariffs when we are 10th in trade deficit with the U.S.? So if you like, is it the Russian, I don't know. Just wanted to ask that.

 
Raja Mohan: There's a question there, yes. Please introduce yourself, I'll come to you next.

 

Suryanath: Hi, my name is Suryanath, I'm a research scholar at Jawaharlal Nehru University. So Trump administration has gone quite some distance in the last 365 days. So my question is to Professor Vijayalakshmi ma'am, can we say that he enjoys full support within the party as well as MAGA base when his administration witnessed the longest shutdown in U.S. history? It is at a time when Republican Party is controlling both House of Representatives as well as Senate. Thank you.

 
Raja Mohan: Thanks, yeah. Maybe start with Afghanistan.

 

Dinakar Peri: Yeah, so there has been no clear indication of what exactly the US want in a larger sense in Afghanistan. So indications and assumptions would be that it will be a limited role, say, operating Bagram itself. I don't think U.S. intends to go back to, say, Afghanistan or in the hinterlands of Afghanistan per se. Because that will be unwinding the whole thing that has happened over the last two decades. I don't think that's in… there's no bandwidth for that in any way, in any manner. Not militarily, not politically. Again, to which politics comes in, the multitude of things, there's no way at all. At best, Bagram, for tactical reasons, say, special ops, advisors, etc.

 
Raja Mohan: So on the discriminatory tariff, you want to say something?

 

Pankhuri Gaur: Yes, thank you for the question. Of course, I've mentioned that India being 37% as a contributor and then 50%, that the 50% tariff is 25% plus 25%, 25% in the sense that because we are trading with Russia, that is why we have been given an additional 25% tariff, right? So basically, that is what I was trying to say. So the trade deficit is not the only thing that is because the tariffs are being pushed. So there are n number of possible, as in, n number of things like trading with Russia or trading with other countries and plus you also see that India, when you're talking about the immigration part or the sectors, as in services sectors, in India is very prominent in U,S.

 

So to curtail a lot of things not necessarily related to trade. This is why different, as in higher trade tariff. And of course, with different differentiated tariffs.

 
Raja Mohan: Yeah. I think, Viji, you want to comment on the domestic question that was asked?

 
P Vijayalakshmi: Yeah, I think it's worthwhile to answer this. Only because I think India is showing some interest in how domestically, what are the coalitions there. First is, the MAGA world is not a monolith. You have to understand there are Trumplicans, there are Republicans, and the MAGA. If you do that, then you realize, and I'm very glad about this question, because there is a huge debate after the Greenland issue and Venezuela, that there are Republicans, some key Republicans, to break ranks. Because what this said…

 
Raja Mohan: Okay, Michael, you want to come in on the domestic?

 
P Vijayalakshmi: Extension of powers in the context of the past. Yeah, can you hear me?

 
Raja Mohan: I think, we just keep missing you. So if we keep it just sharp, then. Yeah, we can hear you now. Just keep it brief, so we keep losing you every time.

 
P Vijayalakshmi: Yeah. Okay, sorry about that. As I said, the main source of Republican solidarity should now be seen, A, MAGA is not monolithic. B, there are Trumplicans, there are Republicans, and MAGA. And C, all of them have despite controlling both the houses, have reacted first time, I'm seeing a crack in the MAGA base. There's one person called Marjorie Greene, who has broken ranks with the president, who is a very loyal supporter. Plus, we're seeing some senators and some house representatives. In fact, the speaker has actually come on record saying there's going to be no troops on the ground on Greenland, which to me represents a major break. So it is not a monolith, and it is not forever, but everybody is going to support the president.

 
Raja Mohan: Yeah, we got that. Yeah, Michael, you want to say on where is MAGA going to hang together or fall apart?

 

Michael Kugelman: I actually was going to very quickly add a comment on the question about tariffs. I don't think MAGA is going anywhere anytime soon, but I'm not an expert in domestic politics in the U.S. On the tariff issue, I fully agree with Dr. Gaur. I mean, India has 50% tariffs, in great part because it does business with Russia. But also worth noting, many have asked me, well, China imports more oil from Russia than India does, so why did India get more tariffs and China didn't? And here, I think one has to look at the issue of economic leverage. I think the Trump administration recognizes that China has the capacity to really potentially hurt the U.S. economy in terms of punitive steps or other types of steps it could take, such as cutting off access to its supply chains and minerals and so on.

 

Whereas, the view in Washington is India does not have that level of economic leverage. I think that's another reason why the administration might have been comfortable imposing more tariffs on India for its Russian oil imports, but not on China. And the other point I'd make on tariffs is that Trump has long fixated on India when it comes to tariffs for reasons that are not clear. I mean, you'll remember in his first term, he referred to India as a tariff king, and he was upset about the Harley-Davidson tariffs, which I know have now been removed, and so on.

 

Very quickly on the Bagram issue, I think with President Trump, there are many things he says, and sometimes it's hard to know what he's really serious about and what he's not. I think on the Bagram issue, he wasn't really serious about that. If anything, he might have thought, if he was thinking seriously about it at one point, that Bagram would be a way for the U.S. to be in a better position to monitor Iran. I've long thought if there was any real reason why he would want to have access or have control of Bagram, it wouldn't be to watch over China's nuclear or anything like that. It would be to watch over Iran. But I don't think that this is a serious thing that he wants to do. We haven't heard him talk about it much lately, which I think is another indication that it's not really a serious goal that he has, at least now.

 
Raja Mohan: Thanks. Maybe the next round of questions. I saw you.

 

Malancha Chakrabarty: Hello, my name is Malancha Chakraborty, and I'm from the Observer Research Foundation. It's been a great discussion, and given that we've spoken so much about tariffs and trade deficit, I think we should try and understand a little bit about the investment side as well. I mean, you can't have a surplus on the trade account as well as the investment account. So the U.S. has traditionally always had larger, growing trade deficits because it has a huge surplus on the investment account.

 

And that is where the U.S. hegemony lies. It is because of the dollar. And that's not the kind of leverage that any other country in the world. So, I mean, I'm not able to understand why President Trump would try to undermine that. I mean, why is he concerned about the trade deficit? Because tariffs will not drive away investors. So, I mean, if we just think a little bit about that, that would clear up a lot of things for people like me.

 

Ayush Joshi: Hello, sir. I am Ayush Joshi, and I'm a research intern here at the Indian Council of World Affairs. My question is to Pankhuri ma'am. There is a breeding for non-U.S. trade architecture, as you have already mentioned in your presentation, due to the ideology of protectionism. There are multiple regional FTAs that are taking place. Recently, the EU-India FTA is also going. Also, currently, the EU-Markus or a free trade agreement has been signed. So my question is to, how far this will impact the U.S. economy, in particular? Because there is a rising trend of higher price towards consumer side. The primary objective was to reduce the trade deficit, but the trade deficit is also not getting narrow due to the reciprocal tariffs. So this diversion effect, will they diminish the U.S. trade leverage in the global order?

 
Raja Mohan: Okay, thanks. Anyone? Yeah, please.

 

Kashish: Hi, good afternoon. I'm Kashish from U.S. Studies JNU. My question is to Dinakar. You mentioned that the Air Force will have a lot of… 40% will have U.S. engines. But to think of it, that imposing so many tariffs and Trump is not going back, won't it create a friction, even though the iterations take a lot of time? And as the U.S. wants to pitch its F-35s, it does not seem any reasonable enough to create friction and then try to pose as a good, then the customer would just leave. So what are your thoughts on that?

 
Raja Mohan: I saw your hand in the same row, other end. Yeah.

 

Vaishnavi: Thank you so much. So my name is Vaishnavi, and I'm a GeoJurist fellow. So my question, the first is, what is Trump's strategic interest in Venezuela, as discussed by Michael? And the second one is, who is responsible for the U.S. wrongdoings? Like U.S. can sanction to Iran, U.S. can sanction to Russia, U.S. can sanction to Ukraine or something. But who is responsible for the U.S. wrongdoings, if we have seen the UN failures and all? And that is for you, the question.

 
Raja Mohan: Only the US domestic politics, yeah. So maybe we had several questions here. I mean, anyone else? Lastly, we're going to close it with this round. Yes, please. Then I'll give the speakers one round. They can make last remarks.

 

Dipriya Ghosh: Good afternoon, sir. I'm Dipriya Ghosh from Pondicherry University. So my question is to Dr. Michael Kugelman. The campaign itself is named Make America Great Again, but there has been increased protest among American civil society and a sense of discontent. So my question is, what is the viewpoint of the grassroots politics and the U.S. civil society's purview towards Trump's policies?

 
Raja Mohan: Thanks. There's one hand, I saw, right at the end. Yeah. Keep it brief. We're going to close now.

 

Trivedi Jal: Greetings to the panel. I am Trivedi Jal from the Tiesverse Foundation. So my question to the panel is that, given recent developments in Syria, where the transitional government has pushed an offensive towards northeast Syria, and we have seen SDF's rapid withdrawal, so does this indicate that Washington has abandoned the SDF and is looking the SDG towards as an alternative option? Thank you.

 
Raja Mohan: Okay, I think that brings anyone else here? Make it quick.

 

Preeti: Good evening, I am Preeti. As we have listening about the unpredictable nature of the President Mr. Trump. So my question is does this unpredictable nature of Mr. Trump is giving any upper hand to the U.S. foreign policy or U.S. as a whole or we can ask that how much it is helping in maintaining the strong or the most powerful country image of America or U.S.?

 
Raja Mohan: Okay, so we got the last round of questions and I think we will start with Vijaya, you want to quickly respond to any one of these questions. You don't have to pick up all. Are you there? Okay, Pankhuri you want to start, there was a couple of questions on economy.

 

Pankhuri Gaur: How it would affect the U.S. economy as in the increase in tariff, of course there are the recent estimates, of course, preliminary estimates, but yet a deep research needs to be done. But preliminary estimates states that there would be a global reduction in trade around from around 5.5% to 8.5% depending on the scenario as in how much tariffs are being put to how many… as in which all important countries of the world.

 

Secondly, it's not only the global trade that would be affected, it would be as in the global GDP, it is estimated to be around constraint as in decrease around nearly 2% in the middle term and not only globally, but U.S. economy as well. We have seen inflationary, the consumer price indices are increasing and there are areas where, specifically again, the different products are there where the demand that is required by the consumer is not being met. So of course there are economically impact of U.S. as well as seen because of the increase in tariff.

 

And, of course, with the issue of investment versus trade that you mentioned, investment of course, but trade when you were focusing is basically because of the trade deficit, it is impacting the employment in the United States and it is impacting the farmers or the manufacturers there. That is why the targets are there, but of course, investment being an outward FDI country as in investing in a lot of countries still without less predictability of the rules and regulations in the country itself, the outward investment of U.S. is also impacting in a lot of countries and investors are… as in the countries are having a… as in they are not providing it fully in that sense.

 
Raja Mohan: Any other wrap up thoughts you want to briefly summarize. So this is your last chance.

 

Pankhuri Gaur: Okay. So basically of course India has, we are talking about. So we can put it as a… put tariffs on U.S. as well but as professor Vijayalakshmi ma'am that we are restraining ourselves and we are working towards what we can do in the best scenario so that in the near future when the regime changes we are safer in that sense.

 

Dinakar Peri: Just one quick follow-on point they're already even talk to people. So rising price in the U.S. and domestic politics is only if you talk to people there there's already a sense that prices are going up in certain section, certain segments you can just talk to people you hear that. Two, on the Indians, the fallout of it, again, if you talk to people there as a good guilty I have a lot of friends and family there. So if you talk to them, there is a general sense, which if they're not felt in a long time that there's sense of they say that you can feel that antiness against them. One.

 

The other side is, if you actually see there was a survey sometime middle of last year in the U.S., I read it in the one of their publications, which surveyed all the various immigrants, how much do they contribute to the economy or how much do they take from the economy. There's a long list of countries which actually take more than they give back, but among those who give back to the country than they take. Indians on the top. So there's a bit of a… Indians of the collateral damage if you want to call it. So it's a bit in between.

 

And to the question of F35 or do you scare the customers away. See dependencies working in defense the cycles are very long, I mean, you're talking about decades four decades, five decades. And dependencies it's not just a straight thing it works in circles, it's not direct. There's no cost, there's a cause and effect. Something else some hits you somewhere else. And again, the cycles are not in terms of platforms, I mean, it can be very subtle your spares, maintenance, support say delays in deliveries simple thing.

 

So, for example, Apache was delayed, but the U.S. stopped it, but it prioritized something else it is delivered a couple of years because never is actually I think 8th or 10th on the line if I remember correctly. And finally we got it after intervention at all the highest level saying below the six sectors. Even the engine delays, I mean, it's more supply chain, the point is there are delays. So India has faced enough technology denials and progress over the decade. So we know we're faced that I'm not saying it will happen, but the point is that always dependency is always there that's always a sword hanging on your neck.

 
Raja Mohan: Vijaya, are you there. I mean, you want to any last toughts.

 
P Vijayalakshmi: Yeah, I can share a few thoughts, if I may. Okay. Let me just talk about the systemic effects of Trump 2.0, because that was one of the questions, which I thought was very interesting. First is that, Raja, think about it. Allies are now internalizing responsibility. Just look at the overall picture, and I think this is an analytical point that needs to be made, NATO, etc., etc. But rather than just hedging and renewing trust or managing, they are, I think, internalizing responsibility.

 

Second, I think adversaries are probing rather than confronting. I wonder what your thoughts are on that, Raja. We must discuss this. But this is my thinking at this point, because the thresholds are being tested, whether it's Taiwan, how far can I go with Ukraine, or Iran also, whether there should be a regime change. So there are too many things, but there's more probing than actual confrontation. So that's another interesting thing.

 

And then, there's also volatility in the conflict regions. While deterrence still exists, crisis management has become more difficult, because commitments appear conditional, and the signals are becoming extremely inconsistent. So I think this is a systemic impact of Trump 2.0. And the key driver, as I mentioned even earlier, is ideological. And it has produced anticipatory hedging. And at the same time, I would say this ideological constraint will outlast Trump. And that's something that we should all be prepared for.

 

Because I think subsequent administrations, I'll just briefly end there, because domestically, subsequent administrations, whether it will be hit third term for Trump, I'm not prepared to say at this point. But we'll face limits, not primarily from allies or institutions alone, because that is clearly not something that they can control, but from domestic political coalitions at home. So this is what we should look for, and this is what we need to unpack and keep in mind. Thanks.

 
Raja Mohan: Thanks, Vijaya. Thanks for those insights at the end. Michael, you left the last word. But before I give it to you, I'm again shocked by my audience here, a lot of young people. But nobody's asked you about China and G2. So tell us a bit of what's happening between the U.S. and China. Should India be worried, or should India be taking it in its stride? So you can just add that to your many other points that have come up.

 

Michael Kugelman: Thank you. In fact, I was going to bring up China because I was going to respond to the question about Trump's strategic interest in South Asia, as I had said before. He doesn't really think in terms of strategic interest. So I don't think that he has much of a strategic interest in South Asia. Though I do think that certainly in the economic realm, he still wants to pursue aggressively competition with China. And I think that might then say something about his views and his administration's views on a critical tool of U.S. government, which was birthed several years ago, that being the U.S. International Development Finance Corporation, which is meant to use investment to help pursue U.S. interests in the Indo-Pacific, and clearly it's meant to counter China.

 

Critical minerals is now a big part of what BFC is meant to do, and so I suspect that Trump and the administration might want to ramp up BFC activities. BFC has been fairly active in India, but not in many other places of South Asia. Labor rights considerations have prevented it from operating in Bangladesh at all. It's not really that present in Pakistan. But I do think that BFC could be a vehicle that he and his administration might use, assuming there continues to be a desire to pursue competition with China, which I think there will be. But as we saw from the Trump administration's national security strategy, it does appear that there is a willingness to take a bit of a more soft approach to China compared to what we saw with Biden, with Trump 1.0, and even going back to Obama.

 

I'd close with this. If we're looking for signposts in terms of what to look for in terms of U.S. policy in South Asia, in the second year of Trump, watch our new man in New Delhi, the new U.S. ambassador to India, Sergio Gore. He is very close to Trump. He's very powerful in Washington, and he has two hats, not just ambassador to India, but also U.S. South Asia envoy, a post that's never existed before in the U.S. government. He's clearly been empowered to do a lot. And so what he does, I think, will give a good indication as to where the president will go on South Asia, given how close these two men are. And already we've seen Gore have some very interesting meetings.

 

He spoke with what I assume to be former Chief Advisor in Bangladesh, Mohammad Yunus. The election is coming in a few weeks. But he has engaged with South Asian leaders on a level that I had not expected. So that will be an interesting thing to watch, is what does the U.S. ambassador to India do in his approach not just to India, but to South Asia on the whole. Thank you.

 
Raja Mohan: Thanks, Michael. It's really my pleasure to bring this to a close. I mean, with just a few concluding remarks, I'm not trying to summarize what's happened. But I think just to touch on some of the issues that have come up, first is the trade issue, which has been the main irritant now between India and the U.S. I think discrimination, that is a central political reality. But there's nothing we can do about it. So merely complaining it is discrimination, which is good in augmentation, in propaganda, if you will, or mobilizing sympathy.

 

But the fact is, in fact, what Trump has done is undercut the fundamental principle of the GATT-WTO system, that you don't discriminate between trading partners. Well, if you see from the beginning, the announcement from Trump policy was, I'm going to use tariffs as an instrument of leverage against the rest of the world, and not on a uniform basis, but actually, show me the country, I'll show you the tariff. And I think he's stuck to his word. He called it indiscriminately, today it is the French. Oh, are you criticizing me 200% on your wines?

 

So this is the attitude, that is the fundamental approach. Now you can say it's good, bad, ugly, whatever it is, but the fact is that is the way he is driving policy. And at the root of it, I think we've got to recognize, is America has turned its trade deficit into a leverage. That is, since much of the world has no option but to export to the U.S. U.S. to use the economist's jargon, is the sink for global exports. China is exporting but doesn't import much. Therefore, whatever you do, one reason why we've been silent, is your exports, most of your exports go to the United States. Just goods around $80 billion. We export $5 billion to Russia, we export $10-12 billion to China. That's it.

 

So you can do what you want on strategic autonomy, you can talk about multi-polarity, you can talk about BRICs, but your core exports are going to the United States. Therefore, how do you manage this situation? It's the policy challenge and not merely a rhetorical question. It's useful when people like us are paid to do the right academics and all of us are journalists, media editors. But the reality for a policy maker is, you talk about trade deficit, there are shrimp farmers from my home state, Andhra Pradesh, there are textile workers from, Tirupur, there are diamond merchants from Surat, what happens to them?

 

So how do you manage this sudden blow that has come to you with a country that is now seemingly unbound and is willing to use its market as a leverage? So we've got to deal with this, it's unprecedented, it's different from what we've had to face with the U.S. before and deal with it. Second, I think on the immigration question. Look, as I said, I'm also from Andhra and there are too many of us in the U.S., but the fact is this, that every wave of foreign immigration in the U.S. faced hostility at some point or the other.

 

Go back to the Irish. For a long time, the Irish were not seen as whites. They were seen as outsiders, they were Catholic. In the land of wasps, the Irish were unacceptable for a long time. So was the problem with the Jews, with the Italians. So in a way, the logic of America, it's capitalism needs foreign labor to deal with enormous possibilities that exist for capitalism, but at the same time, socially what you import, as one of the participants said, you import labor, it depresses wages and it produces other effects socially and raises questions about social coercion. Is America a white country? Is it a Christian country? Those issues today, as the non-white population has grown, as alien populations have grown, the question of shifting balance socially, that's become an issue.

 

So now, Trump himself has oscillated between the two. The Ted pros in Silicon Valley want the Andhra Cousins, but as you saw from Texas and California, guys are saying, no, there are too many of these guys. So I think that's a tension between what the corporate logic wants immigration, while the social logic says there are too many of them, and I think that tension will play out. But it's not an argument we can influence. That's an internal argument between American corporations and the American civil society and the question of how that works out is something we can only let it play out and we're not going to challenge it or argue about it because it's not a right to immigrate.

 

Contrary to all my cousins in Hyderabad and Vijayawada, I would think, do an engineering degree is your right to go to the U.S.? Oh, my God, they're stopping us. How dare they? But you know how difficult it is to get an Indian visa? If you know that, if we can see that, so this is a sovereign right of a country to decide who comes in. But because of the internal contestation between those who want immigration, but they don't benefit, they're not doing a favor to anyone. And those who fear the consequence of it, I think that's a tension that will play out.

 

Third, I think we didn't talk much about multilateralism. I think whether we talk about WTO, whether we talk about UN today, we're going to see what the charter of the Global Board of Peace is going to do tomorrow. But it's actually quite a dramatic moment. I mean, all these years we've had George Bush at the UN or Trump 1 in the UN or last year in the UN. Bashing UN was part of the Republican tradition. But no one has expected this administration to do the same. A parallel structure, seemingly, is going to be created for peace and security. And Indians are so keen to get into a permanent membership of the Security Council.

 

Maybe this is your chance to pay one billion and get somewhere in the Board of Peace. I'm just being facetious here. But the fact is, he's created a charter that he's calling people to sign. Let's see how many people sign up on Thursday when he does. But I think this is a fundamental shift. And I think here you've got to remember, the mandate for this has come from a unanimous UN Security Council resolution. 2803 passed in November 2025. The Chinese and the Russians went to the bathroom, sorry, they abstained.

 

So the so-called Global South, the so-called Europeans were great champions of multilateralism. And the Muslim countries, everybody voted for it, of creating a peace framework for Gaza, which will be run by one man called Donald Trump. But this extraordinary by UN history that you hand over the responsibility for a conflict management to one person and nobody objected to it. So you can argue that, look, there's all violation of... But the fact is, you give him an inch now, but they can take a mile out of it. We don't know, but I think that's the story. But I think this is just the beginning of a real debate, I think, how to organize global multilateral institutions, what happens to them. So this, again, I think something India will have to follow that.

 

On China, I would say Trump talks about a G2, but as Michael said, the amount of sanctions China has imposed is lifting some, is imposing some. One day he is not going to defend Taiwan, next day it's selling arms to Taiwan. So I think the contradictions between China and the U.S. have not disappeared and I think we must expect some of that will continue. But I don't think our policy towards either now must be premised on what happens between the two of them. Therefore, I think we need to pursue our own overall policy of engaging both the powers in different ways. Our problems with China are more than our problems with the U.S., but I think the question that our policy towards China or the U.S. cannot be premised on the nature of conflict or good relations between the U.S. and China, but it must have an independent policy.

 

And finally, on Pakistan, I'd say, you know, everybody thinks something big has happened, but Pakistan is still under the 25th IMF program, stuck at $400 billion GDP. You can say how much Trump might give them attention. Pakistan is struggling to reform its economy. I think that's a reality that is one country like Iran where per capita incomes have gone down in the last 20 years. I think it's quite a shocking thing to have the way Pakistan economy has performed. So what it has, trying to leverage its military for specific gains, whether this will work this time with the Americans, but this is a story we've seen since the last 80 years.

 

To talk about the Middle East Pacts, what is the Baghdad Pact? What was the Central Command-Pakistan Relationship? This is not something new. This is really the Pakistan geopolitical relevance to Middle East has never disappeared. Now you see the comeback in some sense, but none of the last four or five times it worked. In the end, Pakistan really was used and discarded, but that will be the story or it will be something different. We will see.

 

Finally, I would say South Asia, I think, it's good for us to do our own thing. Trump is not stopping India to do more in South Asia. Therefore, I think we see Chinese presence is growing, the Middle East countries, their influence in South Asia is growing. Therefore, I think for us the question is, what is our own South Asia strategy? And I think rather than framing it in U.S. terms or China terms, what do we do to improve our own position in South Asia, I think, becomes the key. And I think that takes me to the last point, which is really, I think there's a moment for actually for India to focus on the inside. That is, external world is turbulent.

 

Trump has introduced unprecedented uncertainty. There are variables that you can't control. But the one variable you can control is your own internal strategy of reform, which is what we are seeing already the Prime Minister is doing some reforms. We'll wait for the budget to see if there's going to be more reform. Change your internal structures, modernize your internal structures that will increase your capability to deal with a difficult world, I think, which is what most middle powers are going to do, which is what India is saying it will do.

 

Therefore, I think that's where we are headed. Therefore, there's enough leverage, enough agency for India. So I would say be careful and let's deal with the great storm that's coming at us. I'll stop here and I want to thank ICWA for inviting us and please give me a hand to all the panelists who have spoken.

 

Unidentified Speaker: Thank you, sir. It just leaves me to thank our chair and our panelists for sharing their thoughts with us this afternoon on a topic that clearly is of a lot of interest. I also thank our audience for their participation in the discourse. I now invite you all to join us for tea. Thank you so much.

*****

List of Participants

1. Dr. C. Raja Mohan, Distinguished Professor, Motwani-Jadeja Institute of American Studies, Jindal Global University (Chair)

2. Mr. Dinakar Peri, Fellow, Security Studies Program, Carnegie India

3. Dr. Michael Kugelman, Resident Senior Fellow, South Asia, Atlantic Council (Online)

4. Prof. K. P Vijayalakshmi, Head, Department of Geopolitics and International Relations, Manipal Academy of Higher Education (Online) 

5.  

   Dr. Pankhuri Gaur, Assistant Professor, Research and Information System for Developing Countries (RIS)