Daily Times

If the past year was a year of annushorribilis, which saw tens and thousands of people dying in Syria, Yemen and Iraq, and thousands escaping from these war ravaged countries, growing conflict in South China Sea, and terrorist attacks in Germany, Belgium, France, portends for the current year does not look very hopeful.

First, we had Donald Trump elected as the 45th US President, in spite of vicious campaign against his presidency by both the print and electronic media. His flippant and boastful comments on women were disgusting and his America First campaign indicated that he will follow a protectionist policy that will only safeguard the American interests. His campaign had the potential to reverse the globalization and free global trade. He had already indicated that he would dismantle many of the initiatives taken by his predecessor like the Trans Pacific Partnership Agreement (TPPA) that aimed at promote economic growth in 12 countries by lowering the non tariff and tariff barriers to trade, withdrawal from North Atlantic Treaty Organization (NATO). TPPA was aimed at counterbalance the growing economic influence of China in the Asia-Pacific rim. By withdrawing from the agreement, the United States will not only lose its dominant position, but unwittingly will hand over the leadership to China.

Similarly, withdrawal from NATO would only end up helping Russia to assume a leadership role in. Some of the European countries like France and Germany unsure of the US policy have already started warming up to Russia.

The political pundits felt that Trump’s election speeches were aided at pleasing his electorate. However, he meant what he had said during the campaign. His first act as the President was issuing an executive order to withdrawn from the Trans Pacific agreement.

The US abdication from global leadership will would benefit two countries: Russia and China. Both will now assume a dominant position in the Middle East, Europe and Asia. Russia has already gained an upper hand in the Syrian conflict by rescuing President Assad from a certain defeat. Tens and thousands of Syrians have perished in the war, and thousands are fleeing from Syria to Europe and other countries because of misplaced policies of the United States. Many allies of the US like Turkey, France and Germany, are being driven towards Russia because of the incoherent foreign policy of the United States.

China, in gross violation of the arbitration award in favour of Philippines, is building military bases in disputed islands. Similarly they have made inroads in both South and Central Asia by building “One Belt One Road” with the help of their friend and ally Pakistan. By building the road though the old Silk Road, The road is being built to revive its stagnant industries and give a boost to its exports.

Xi Jinping, being a shrewd politician, is aware of the waning US influence and is now donning the role of a statesman and a well-wisher of countries in Asia by investing heavily in infrastructural projects. This is evident from the speech he gave at the World Economic Forum at Davos, Switzerland. In a veiled reference to Donald Trump, Xi defended globalization and was critical of any form of protectionism. Referring to the present financial crisis faced by many countries, he said everything can’t be attributed to globalization and many of the world’s ills were more on account of governance issues. He said the best way would be to fix problems instead of being critical of globalization. Quoting a Chinese poem he said that “Honey melons hang on bitter vines; sweet dates grow on thistles and thorns. He advised countries facing problems of globalization, should we should adapt to and guide economic globalization, cushion its negative impact, and deliver its benefits to all countries and all nations.

XI Jinping also said that as the world is now interconnected, any trade barrier will have disastrous consequences, a surprising departure from the protectionist policy followed by his own country. He appealed to all the countries to look beyond their self interests and support global free trade and investment. Pursuing protectionism is like locking oneself in a dark room. While wind and rain may be kept outside, that dark room will also block light and air. No one will emerge as a winner in a trade war.”

Both China and India will be affected if Trump pursues a protectionist policy. He has already indicated that he is against all forms of outsourcing to third countries as it has led to the Americans losing their jobs. As Indian exports in software and business outsourcing is over $ 100 billion, India will be hit the hardest. Similarly, the total exports from China to the United States are around $ 500 billion, which is also at the risk of Trump’s America First policy. Stricter trade protectionism and the resulting higher tariffs will have a negative impact on the countries that rely on the US for their export revenue. The biggest threat to growth is the possibility of a protectionist turn, which could depress global trade and even trigger trade wars.

Similarly, he is against American Investment in China for he feels that the US-China relations are asymmetrical with the balance of trade heavily loaded in favour of China. He is likely to force the American investors relocate their businesses from to the US. “We have made other countries rich while the wealth and confidence of our country have dissipated over the horizon.?.?.?Protection will lead to greater prosperity and strength.”

However, what Trump has not realized his protectionist policy will be met with retaliation by both China and India. As the US accounts for over 12 percent of India’s arms and aviation requirements, it will be forced to source its requirements from Israel, Russia and Europe, which can affect the US.

In sum, while Xi Jinping speech at Davos was one of a statesman where he advised countries to look beyond the narrow prism of self interest and work towards International cooperation that can be mutually beneficial to all the countries. In sharp contrast of Xi’s thinking global, Trump wants the US to concentrate only on domestic issues for safeguarding the American interests. The Chinese President’s statement that China will not use the yuan as an economic weapon will go a long way in boosting the confidence of countries in pursuing free trade. The change in Chinese tactic should be taken advantage by Trump and steps should be taken to allow free trade between countries.

As a Chinese media aptly put it, any protectionist policy by the US would inevitably lead to trade war, a prospect that should be avoided at all costs. It is hoped that Trump realizes the folly of his ‘America First’ policy, as it will not be in the long term of interests of the US. Moreover, by following a protectionist policy, he will only facilitate the abdication of US leadership thereby creating a maelstrom of uncertainty in Asia and Europe.

The author is an independent columnist and a well known writer on socio-economic issues.