When Donald Trump had jumped in the race for the President of the United States or POTUS in short, last year, he was a felon facing about 32 charges, but he persisted and by November 2024, there he was - the highly improbable would-be President.

While some of his old traits were known from his first Presidency, even his best and intimate friends would not have known that come Jan 2025, he would assume the Presidency with a pen for writing Presidential Executive Orders in the White House; relentlessly spewing shock and fury; disposing off ‘surplus’ workers in government and other jobs; throwing out immigrants, including at times legal ones and losing ally’s far and wide.

Perhaps, we should mimic the Americans and sigh “Bejesus”, if you prefer. That is what an American is likely to choose as his expletive, when he/she is unable to find a better one, without being rude.

Even before he became the POTUS the first time , his erratic behaviour was fairly well visible, but it seems to have become worse. He is no doubt a Bully and like most known bullies needs to be confronted and not appeased. It reminds me of Edward Albee’s masterful play, ‘Who’s Afraid of Virginia Woolf’, a dark comedy, first staged in October 1962.

With the play’s razor-sharp dialogue and the stripping away of social pretence, it was seen as a brilliantly original work of art—an excoriating theatrical experience, surging with shocks of recognition and dramatic fire. I see Trump’s antics, both before and after he became the President of the USA for the second time, as another dark comedy, hence the title, modified for the present.

However, it is unlikely to help us as he is overwhelmingly influenced by an earlier POTUS, McKinley, who had successfully dabbled with tariffs in his time. However, perhaps Trump needs to be informed that when during 1899 -1901, William McKinley was President, it coincided with the Gold Rush and hence people with deep pockets were less affected by tariffs, like it is today!

It may be appropriate at this stage to peruse what Past President Roland Reagan had stated during his tenure as the POTUS in 1989-1993, His remarks, formally expressed were as under:

“When someone first says let’s impose tariffs on some foreign imports, it looks like they are doing patriotic things by protecting American products and jobs. Sometimes, for a short while it works, but only for a short time. What eventually occurs is first home grown industries start relying on government protection in the form of high tariffs; they stop competing and stop making the innovative management and technological changes to succeed in world markets and then when all this is going on, something even worse occurs.

High tariffs inevitably lead to retaliation by foreign countries and the triggering of fierce trade wars. The result is more and more tariffs and higher trade barriers and less competition. Soon, because of the prices made artificially higher by tariffs that subsidise inefficiency and poor management, people stop buying. Then the worst happens – markets shrink and collapse, businesses shut down and millions of people lose their jobs. The memory of all this occurring back in the 1930’s made me determined when I came to Washington to spare the American people the protective legislation”.

There are many subjects for analysis from four major policy subjects that Trump has set for himself and also articulated. These are immigration; increase in the geographical size of the United States by annexing not just pieces of vacant lands lying somewhere, but whole countries and I daresay perhaps oceans, seas and other water bodies; thinning out government workers and maybe some from the military too; reduce or preferably cut different types of institutions, like schools, universities and providers of finances, like US Aid and others, besides the ‘mother’ of them all, viz. tariffs!

These fall squarely in what President Trump wants to achieve, viz. MAGA. It stands for Making America Great Again. As things stand today, the President seems to be taking his nation not to greatness but is perhaps leading it for a slow move towards relinquishing its premier position in the world as a Superpower, perhaps in the next decade or two!

Already, so much paper has been written about the foibles of Donald Trump that books can be written! I will therefore only amplify details about the tariffs or more appropriately called ‘trade wars’, which will inevitably break out.

Within two days of presenting a chart showing what percentage of reciprocal tariffs will apply to practically all nations of the world that trade with USA, President Trump has hastily called a 90 days unilateral ceasefire in the global trade war that he launched with so much fanfare and bluster on April 2, called ‘Liberation Day’ by him.

Tariffs continue to be imposed on China though and at an enhanced rate of 125 percent. Perhaps President Trump became unnerved by the huge stock market meltdown, in which his own supporters also lost millions of dollars.

Earlier on Wednesday, hostilities had escalated as China had announced additional levies on American goods, hitting back at the United States. Stocks and bonds had also slumped across the globe, which heightened fears of a global recession.

President Trump, being a mercurial person, one does not know whether the three-months pause now imposed will last. Caution is therefore important, especially when the impact of these tariffs starts hurting Americans, which it will, sooner or later. India is however better positioned among emerging markets, due to its relatively lower tariffs.

The Indian Economy is primarily domestic driven, with exports constituting a small portion of GDP, making it less susceptible to global trade disruptions. Another factor that works in favour of India is lower crude oil prices.

The US accounts for 18% of India’s total exports (versus 23% for Taiwan, 19% for South Korea and 15% for China) but relative to GDP, it is around 2% for India and 3% for China (versus 14% for Taiwan, 10% for Thailand and 7% for South Korea). Most sectors in India derive less than 10% of their revenue from exports to the US and IT and Pharma are the only sectors with large US exposure and both have been exempted from tariffs.

The US had imposed a broad country level tariff of 26% on exports from India, effective midnight on Apr 09. However, the Pharma, Steel, Copper, Bullion, Energy and certain Minerals / Commodities that are not available in the US are exempted, while tariff on automobiles is 25% for all countries. Notably, tariffs announced on their key competitors are higher than India. This could be a positive point for Indian manufacturers.

Import tariffs on other countries in the region, like China (34%), Vietnam (37%) Taiwan (32%), Thailand (36%), Indonesia (32%) and Bangladesh (37%) are much higher than India’s (26%). Interestingly, the US announced reciprocal tariffs on only half the rate that other countries impose on US products, which leaves room for negotiations.

Pharma companies have the highest exposure to the US followed by Chemicals / Agrochemicals, Textiles and Auto Parts.

Apart from Vehicles, the Auto tariff of 25% will also cover auto parts, including engines, transmissions, lithium batteries, tires, shock absorbers, spark plug wires and brake liners.

India’s top exported category to the US, with $ 22 billion in exports (13.5% of total exports) are Machinery and Electrical items.

The latest round of tariffs may help Indian exports get more competitive, compared to China and Vietnam, which had a market share of 21% and 19% respectively, compared to Indian 6%. The reciprocal tariff on China has increased the duties to 34% and 46% for Vietnam. Furthermore, Indian apparel exporters could potentially benefit from China + 1, as the tariff advantage for India makes it a sound sourcing hub.

Indian exporters of art and polished diamonds might be hit because this category accounts for 57% of all gems and jewellery exports ($ 13.6 billion) from India to the US. Currently there is no duty on items sold in the US but this will rise to 26% now.

Meanwhile, India has already offered reductions in its own tariff rates charged to the US and has increased energy purchases from the US in March 2025. Earlier, India had already reduced tariffs on motorcycles, which would benefit motorcycle exports from the US to India. Additionally, the Indian Union budget had announced a cut in import duties for all countries on other sectors, like electronics and steel.

The United States accounted for 5% of India’s crude oil imports in Financial Year 2024 and as per the agreement between the two countries, US could become a leading supplier of oil and gas to India.

In conclusion, let me post extracts from a recent speech of the Prime Minister of Singapore, as it covers comprehensively the essence of the vast changes that President Trump wants to make.

“The era of rules – based globalisation and free trade is over. We are entering a new phase, one that is more arbitrary, pyrotechnists and dangerous.

For decades, the US was the bedrock for the free market economies of the world. It championed free trade and led efforts to build a multilateral trading system; anchored by rules and norms, where countries could win benefits through trade. This WTO system brought unprecedented stability and prosperity to the world and to the US itself.

The system is not perfect. Many countries have long called for reform to update the rules and to make the system better. But what the US is doing now is not reform. It is abandoning the entire system it had created. Its new approach of reciprocal tariffs, country by country, is a complete rejection of the WTO framework.

If other countries adopt the same approach as the US, abandoning the WTO and trading only on their own preferred terms, country by country, it will spell trouble for all nations, especially small ones like Singapore. We risk being squeezed out, marginalised and left behind.”

India, as well as other countries have to take resolute steps to ensure that they do not get bullied by the persona of President Trump and not adopt an appeasement mode.

Lt General Vijay Oberoi is a former Vice Chief of Army Staff of the Indian Army and the Director General Emeritus Centre for Land Warfare Studies (CLAWS). The views expressed here are the writer’s own.

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