Finally, the U.S. election results are out. The Republican candidate Donald Trump has swept the polls by winning convincingly in the presidential contest as also leading the Republican Party to majority in both the Senate and the House of Representatives. There is no grey area. It is apparent that the majority of the American voters have shown confidence in this political maverick who has promised to Make America Great Again. For the Democratic Party, the 2024 elections results have brought some uneasy questions to the fore. The party leadership has to go into it after full results come out.
Now what is going to be the global impact of the second presidency of Donald Trump? To start with, it has to be mentioned that Donald Trump will take over officially the president’s position on January 20, 2025 and so there are 75 days left between now and January 20 next year. During this intervening period, the Biden government will be having a lame duck character, the president will not be able to take any major decision.
In a normal circumstance, there is no problem in such transition. But right now, two major wars are going on in West Asia and Ukraine. The USA is very much involved with both. Its decisions matter. Trump said in his election speech that, if elected, he would stop Ukraine war in 24 hours by talking to Russian President Vladimir Putin and Ukrainian President Volodomyr Zelensky. This was a rhetoric in an election campaign speech but it will not be surprising if Trump makes some major move on both Israel-Hamas war as also in Ukraine. Even before his takeover officially as the President on January 20, he can informally convey his views to the secretary of state and ask him to proceed accordingly. Good or bad, some change will take place on the two war fronts, possibly even before January 20, 2025.
It is apparent that the allies of USA, especially NATO and European Union are panicky. Even before Trump crossed the majority figure-270, French President Emanuel Macron telephoned Trump and congratulated him and also assured that he would be happy to work with him. This is diplomatically inappropriate by international standards. Yet, the European leaders are just lining up to prostrate before the second term President by assuring that they are friends and not anti-USA.
The Prime Ministers and the Presidents of the European countries have noted with concern what Trump said in September this year in his election campaign in Wisconsin. He said: “We have been treated so badly mostly by our allies, our allies treat us actually worse than our so called enemies.”Then he mentioned: “In military, we protect them and then they screw us on trade. We are not let that happen anymore.” The signal is very clear from this. Trump advisers say in the policy paper on second term that there will be no compromise on the issue of trade. The European nations along with China and Japan have to suffer the brunt. US has borne it too long.
In his last term, Trump withdrew from a number of international agreements including the Iran Nuclear Deal and the Paris Climate agreement. Trump wanted the NATO member nations to share the expenses as per the norms. There was some last minute understanding and Trump did not substantially cut the US funding. But now, in his second term, he is more confident, he takes decisions on the basis of his own understanding. He has a great authoritarian streak and has scant respect for Pentagon bosses. For the peace movement workers, Trump can be an enigma, he can give 24 hour deadline to contending forces for ceasefire or he can take a position to finish one side. Trump is a disruptor in a status quoist international bureaucracy. The results may be good or bad. The Republican President will be more unpredictable in his second term.
What about India? To start with, Prime Minister Narendra Modi has reasons to be pleased for political reasons but the impact on the Indian economy will be adverse. Modi has some commonality with Trump. They both share same streak of authoritarianism and Islamophobia. But Narendra Modi is a cool person and not a maverick like Trump. India will get some relief in the latest diplomatic tangle with Canada and US agencies. Trump’s personal help to Narendra Modi will be of big value at this moment.
Then there is the issue of Bangladesh, The head of interim government of Bangladesh Dr. Muhammad Yunus was desperate to meet the Indian PM at UN assembly session in New York in September this year, but Modi avoided. Modi also was waiting for the US elections. Trump has made his position clear about Dr. Yunus in his message on Diwali. Now the days of Dr. Yunus are numbered. He is known as a friend of Hillary Clinton. He is a pariah to Trump. The US policy will change drastically on Bangladesh and that will be done in consultations with Indian Prime Minister. So that way, Modi will get some relief from this eastern neighbour.
What is the impact on Indian economy? Trump is basically a businessman. He understands politics from the prism of business and economy. In his second term, he will initiate a trade war — primarily with China but also with India, whom he described on 17 September as a “very big abuser” of bilateral trade. The tariff hike will impact Indian exports. Pharma exports will be further hit as Trump is committed to disband or dilute provisions of Obamacare.
The US is India’s largest export destination, and received 18 per cent of Indian exports in 2023-24, up from 12 per cent a decade ago. For India maintaining the export growth to USA and even increasing the level are of crucial importance for the domestic industry. Trump’s higher tariffs on imports by US will have impact on the US consumers also. A good section of US industry is not in favour of higher tariffs on Chinese imports as their manufactured products will be more costly. The Trump policy has its own drawbacks also from the overall perspective of US economic growth. The policy can be calibrated later.
In all, the Trump 2.0 world will be a trying period for both the leading nations like China, Russia, EU nations as also India. Prime Minister Narendra Modi can make use of his personal rapport with Trump to offset the impact of some measures. Even within a tough policy frame, there is scope for calibration. The Indian Prime Minister has to do that to protect India’s economic interests under the second term of Donald Trump. (IPA Service)
