Early this month, the Trump administration reportedly instructed the Office of the US Trade Representative (USTR) to draft text for a partial trade deal with India. In the hope to announce the same at the United Nations General Assembly later this month, Trump’s direction to the USTR on a partial trade deal follow his comments at the G20 summit earlier this June. Ahead of the opening of the G20 summit in Osaka, Trump announced, “I think we’re going to have some very big things to announce. Very big trade deal. We’re doing some very big things with India in terms of trade, in terms of manufacturing.” Thereafter, at the G7 summit in Biarritz last month, Modi and Trump discussed trade frictions between the US and India. Sitting alongside the American president, Modi even remarked, India has ‘welcomed US suggestions’ on ‘many’ trade issues that persist between the US and India.
This chain of events — reflecting continued American proclivity, possibly culminating into a partial trade deal — could bear the much needed easing of recent trade tensions between Washington and New Delhi.
The trade impediment in US-India ties
In recent months, the narrative on the US-India dynamic has been raided by tensions on the trade front. Under Trump, the US has sought “fair and reciprocal” trade relations with other nations. With India registering a trade surplus vis-à-vis the US, the Trump administration also turned its crosshairs on New Delhi. As the trade talks progressed, a fundamental divergence between the Indian and American trade negotiators began to emerge.
The Indian side approached the negotiations largely from the standpoint of addressing the Trumpian aberration of the US seeking a reduction in trade deficit with its partner nations. Thus, India sought to increase its import of defence platforms and energy from the US. As a result, US exports to India registered a 28 percent increase last year, effectively bringing down the goods trade deficit from $22.9 billion in 2017 to $21.2 billion in 2018. The same, however, proved to be of little efficacy in dampening the Trump administration’s ire. Instead, Trump continued his oft-repeated tirades about India having “had a field day putting tariffs on American products.” Over time, the same has been understood to be symptomatic of the American negotiators’ approach to the ongoing US-India trade talks.
Over the past two decades, India’s strategic potentialities animated Washington’s policy towards New Delhi. Longstanding trade issues however — with regards to Indian insistence on price caps for US pharmaceutical products and US dairy products facing roadblocks to the Indian market on grounds of religious considerations of not accepting the use of blood meal — took a back seat. With Trump’s heightened attention to US trade relations, however, USTR negotiators have sought the resolution to those longstanding issues; resolutions that go beyond merely seeking the reduction of US trade deficits.
This divergence in approach prolonged the trade talks, much to the frustration of the Trump administration looking to recalibrate American trade relations under its ‘America First’ outlook. The mounting impatience even triggered the Trump administration to revoke India’s status under the Generalized System of Preferences (GSP) regime. India responded by levying duty on some US goods as a response to the US’ Section 232 tariffs on steel and aluminium.
Against this backdrop, an “early harvest” trade deal, which reportedly may also see the reinstatement of GSP benefits to India, would certainly be a welcome thaw. However, the motivations for President Trump to push the USTR to dampen its negotiating approach at this time, are largely political. A testament to the same is Trump’s decision to join Prime Minister Narendra Modi at the ‘Howdy, Modi’ Rally in Texas on 22 September.
‘Howdy, Modi!’ in the emerging battleground state of Texas
Last year’s midterm election which flipped control of the US House of Representatives to the Democrats, presented an arithmetic challenge for the Trump re-election campaign for 2020. The 2018 midterms proved to be historic in terms of seeing a record number of women being elected to the House. In doing so, analyses suggested the white women vote played a seminal role. Traditionally, white women are known to “vote their party, not their gender.” Hence, in 2016, Trump rode on nearly 53 percent of the vote cast by white women. However, in the midterms, white college-educated women specifically “swung heavily left in 2018, with 59 percent voting for Democratic House candidates, compared with just 49 percent in 2016.” On the road to 2020, Democrats are bullish on capitalising on this shift, to weaken Trump’s re-election arithmetic. Further compounding this challenge, is Trump’s hold on the swing states.
In 2016, Trump became the first Republican presidential candidate — since President George H.W. Bush in 1988 — to win the swing states of Michigan and Pennsylvania. The 2018 midterm results suggest, those two crucial Rust Belt states may switch back to the Democrats in 2020, as the Trump 2016 victory margin was slim. However, given the fact that in 2016, Trump won with 306 electoral votes, he may need to win just one of the three Rust Belt swing states of Michigan, Pennsylvania and Wisconsin, but hold on to the rest of the red electoral map. So considering Trump loses both — Pennsylvania and Michigan — as per predictions, he then has a “ZERO margin for error” to win Wisconsin and emerging battleground states which the Democrats are attempting to flip from red to blue.
One such ‘new’ battleground state is Texas. The Lone Star State played a significant role in handing Trump the White House by “accounting for 38 electoral votes and 7% of the electoral college in 2016.” Although Texas has been a red state, Democrats are depending on the “significant demographic and cultural shifts – a growing Hispanic population and an influx of newcomers to the cities” to loosen Republicans’ grip and spur a “Texodus”, i.e., the political shift of Texas from red to blue.
Building on Democrat Beto O’Rourke’s 2018 Texas senate race loss to incumbent Republican Sen. Ted Cruz (by a thin margin of 200,000 votes), Democrats are looking to mobilise the largely liberal-oriented young, college-educated migrants in the Texan cities of Houston, Dallas, Austin and San Antonio. Hence, this past month, the Democratic National Committee also chose to organise the third Democratic Primary Debate in Houston, Texas.
Thus, in anticipating an across-the-board decline in white women votes, and risk of new battleground states like Texas flipping blue, Trump seems to be on the lookout for supplementary voter bases to offset those losses. In this context, considering that the Texan towns of Dallas and Houston are home to over 270,000 Indian Americans, Trump’s recent decision to join the ‘Howdy Modi!’ rally on 22 September in Houston stands as an election arithmetic no-brainer.
Make Indian Americans wear MAGA hats
Traditionally, Indian Americans — about 65 percent according to a 2014 Pew study, have been Democrats or leaned toward the Democrats. However, with the rise of nationalist fervour in India and America, the Indian American base in the US is faced with a realignment of sorts. It is to marry their political affiliations in America to their emotional alignment with the nationalist Modi dispensation in India. For a while now, the community has been “in a paradoxical situation, as they were largely jubilant about Hindutva in India while being at the receiving end of nationalism in their adopted land.”
Trump seems to have gauged this sense of a flummoxed Indian American community being up for grabs. In order to pull that community away from the Democrats, Trump seems to be employing a playbook similar to his courting of Jewish Americans.
In recent months, Israel has emerged as a faultline in the hyper-polarised American political spectrum. Traditionally, both Republicans and Democrats have been equally vocal about their support for Israel and by extension, the Jewish diaspora in the US. Recently, however, the ‘extreme’ left of the Democratic Party represented by Congresswomen such as Rep. Ilhan Omar (D-MN-05) and Rep. Rashida Tlaib (D-MI-13) has come under fire due to their criticism of Israel’s policy towards Palestinians and purporting the supposed overt influence of the Jewish lobby over American politics. Trump has attempted to play-up their comments as being anti-Semitic and accused the Democratic Party of being anti-Israel. He has thus attempted to consolidate the Jewish American voter base by purporting the Republican Party as the only pro-Israel party. Similarly, Trump is attempting to mobilise the three million-strong Indian American community by underscoring his and his party’s, close proximity to Modi’s India.
In summation, Trump entering the election cycle in the US has in many ways hitched the US’ policy towards India to Modi’s political heft amongst Indian Americans abroad. In the bargain, if the USTR slightly dampens its negotiation approach to pave way for a partial trade deal, that would be a welcome de-escalation of US-India trade tensions.