- Jeffrey Sachs sees India-US trade deal as Trump backing down from global trade wars
- Sachs calls 50% tariffs on Indian imports a strategic blunder by the Trump administration
- He doubts India's $500 billion investment pledge in US sectors as Trump’s exaggeration
Economist, United Nations advisor, and Columbia University professor Jeffrey Sachs believes that the announcement of the India-US trade deal is a sign of US President Donald Trump backing down from his trade wars all over the world. He also talked about India's so-called pledge to invest $500 billion across key American sectors and stop Russian oil imports, which, according to US President Donald Trump, are terms of the deal, saying America does not dictate the global trade relations.
Talking to NDTV, Sachs said the imposition of 50 per cent tariffs on Indian imports was a "blunder" by the Trump administration as it "violated every strategic principle that should have applied." He also opined that the US market will not be very important for India in the future, as the big growth lies in Southeast and Western Asia.
Trump Concedes
Talking about the India-US trade deal, the senior economist said, "Trump is backing down from his trade wars all over the world. This (deal) is part of that backing down."
"Trump came out guns blazing several months ago, not only against India but all over the world. He's backing down step by step. So this is basically part of a retrenchment of US policy," he said.
He further said that the deal appeared to show that in the standoff between New Delhi and Washington, it was the latter who conceded, as "the day before yesterday, the tariff rates were 50 per cent. Now they're 18 per cent."
"The 50 per cent never made sense. This was a blunder by the United States. Trump's mouth works a lot faster than his brain. And that was what happened in that case. Now the US has basically backed down," he said.
He added that high tariffs against India were a "big surprise because they violated every strategic principle that should have applied."
On $500 Billion Investment Pledge
The economist also dismissed Trump's claim that Prime Minister Narendra Modi agreed to buy US goods worth more than $500bn across several sectors, including energy, technology, and coal. He said, "I don't think that anything that Trump says is honest. So there's a lot of bluster."
"Trump says that trillions and trillions have been promised by other countries. This is basically Trump running off at the mouth. He is an unstable and not very bright person. And so we hear a lot of things that simply aren't true. A lot of the big headlines are just announcements that make him feel good. But that doesn't really add anything in substance to economic life. All of these promises of who's going to buy what from whom. This has no basis in general when Trump says that trillions and trillions of dollars have been promised to the US economy," he added.
Russian Oil
The economist also believed that India may not have to completely halt its Russian oil trade, as claimed by Trump.
The US president and members of his team have said that India is committed to stopping buying Russian oil. Now Delhi, however, said it will continue to get its energy trade depending on market prices and keep people's interests first. But it has committed, however, to purchasing energy from non-sanctioned entities.
Sachs noted that sanctions on Russian oil are imposed by the United States and are not UN sanctions. "The US does not have the right to dictate world trade terms," he said.
"This is why the BRICS are so important. The BRICS, as a group, should say to the United States, No, you keep your sanctions to yourself. We'll trade as we see fit. We'll do it politely. But you cannot dictate world trade terms. You cannot dictate how we trade with each other," the economist added.
'Move Away from the US'
Sachs also said that the US market won't be very important for India in the future. "This may sound surprising because the US has had the goal to replace China in the value chain," he noted, explaining that while the US is a rich economy, it accounts for around 12 per cent of global trade and is a slow-growing economy.
"The big growth is in your neighbourhood. The big growth is in Southeast Asia. The big growth is in China, because India and China should be trading with each other. The big growth is in Western Asia, where there's a lot of money in the Gulf. Africa will grow rapidly. So India shouldn't base too much on the US market," he said.
