G-20 eclipsed by Trump’s spat with China, India

The two-day G-20 summit starting in Osaka, Japan, on Friday (June 28) is crucial for reasons unrelated to the multilateral meeting. If India is watching to see whether the United States will back down on its belligerence on the issue of tariffs, the world is keenly awaiting the outcome of the talks between US President Donald Trump and his Chinese counterpart Xi Jinping.

The summit, the second since the previous one in November last year, will be important for what is happening on the sidelines rather than at the various sessions covering at least eight key areas of global concern including reforming the World Trade Organisation and data rules to facilitate ease of e-governance around the world.

The US, under Trump, has in the last few years ruffled several nations without bothering to check whether they are friends or rivals. India has been on the hit list, and so has China.  Of course, the biggest crisis is in the Persian Gulf where Trump has gone after Iran, imposing sanctions and almost threatening to attack it over Tehran’s nuclear programme.  The sword of Damocles still hangs over the region.

For India, the much-anticipated meeting between Prime Minister Narendra Modi and Trump will be important as the outcome will have immediate repercussions on its economy. Unlike China, which has the ability to take on Washington, New Delhi is little match for the US superpower. The Trump administration, while mouthing rhetoric about the so-called deep friendship with India, has been unrelenting in its pressure to force India to tread Washington’s path.

A reluctant India, notwithstanding the Modi government’s brave rhetoric on its might and wish to make the country a $5 trillion economy by 2024, has been led by its nose over Iran. Since the Trump administration removed the waiver for New Delhi in following economic sanctions against Iran, oil from that country has stopped flowing into India.

Also read: India’s high tariff unacceptable, says Trump

If the Modi government expected that it would assuage Trump, that has not happened. Instead, has come the other big shock — the removal of India from the Generalised System of Preference, or the GSP, which allowed New Delhi to export to the US at least 2,000 commodities without paying duties. In 2017, this was estimated to be around $5.7 billion.The only saving grace has been that the Indian government hiked tariffs on 28 US goods in a show of defiance.

For optimists who expect Modi to come up with some magic and bend Trump the news on the eve of the summit is not exactly heart-warming. Trump on Thursday repeated his  position that India must reduce tariffs on US goods indicating he will not take no for an answer.

The world, meanwhile, is taut with tension over what will happen to the Xi-Trump talks.  For, this one will have far reaching consequences everywhere. Already, the US move in imposing tariffs on $200 billion worth goods from China and Beijing’s retaliatory tariffs on $110 billion worth US goods have served to adversely affect the global economy.

In addition, the Trump administration’s moves to checkmate Chinese technology giant Huawei has expectedly not gone down well in China and in other parts of the world. Using the reason that Huawei is some sort of front company of the Chinese government and that will cause security issues, the US is pressuring its allies, including Britain and India, not to allow the company to roll out its 5G systems in their countries.

Trump is not known to request. His preferred method is to demand obedience. Regarding Huawei, he has clearly stated that if his missive is ignored, these countries could face US technology sanctions. Reports quoting analysts from around the world say there is no expectation that the Xi-Trump meeting will yield any immediate result. If the two agree to another meeting and draw up a timetable of talks to iron out their trade differences that in itself will be an achievement.

The trade war between the US and China has resulted in a massive disruption in global supply chains, slowed world growth and affected the world banking system among other things.In the event of the Xi-Trump talks capsizing, the US administration will go ahead and impose tariffs on the remaining $300 billion worth goods from China, which have until now not been targeted. This will naturally see retaliation from Beijing and then it will be a no-holds barred trade war, the results of which can drag the world down with it.

Another key meeting is between Russian President Vladimir Putin and Trump which, again, is being seen with bated breath. There is  no love lost between Putin and Trump with Russia suspending its treaty on intermediate-range nuclear forces (INF) after Trump walked out of the deal. Putin’s criticism of Trump in St Petersburg in early June is also expected to figure in the talks between the two.

So much of bilateral space is being taken from the multilateral meeting in Osaka, the host, Japanese Prime Minister Shinzo Abe has been quoted as reminding the participants they must focus on the official agenda of the G20 summit, which is equally important.The news agency Reuters quoted a Japanese official as saying, “There’s not many topics all participants can agree on. Maybe plastic garbage reduction is the only area no one opposes.”