DC Edit | After US Threat, Brics Must Enhance Trade Within Bloc

The summit of BRICS nations did not have the presence of XI Jinping or Vladimir Putin to add heft to the declarations. The leaders at the meeting did, however, express their concerns about security and how terror poses a threat to that with Prime Minister Narendra Modi leading the way in his long campaign against state-sponsored terror of the Pakistan variety, as in the Pahalgam attack.

Now that Donald Trump has made it clear that he considers BRICS as pursuing “Anti-American” policies and is imposing an additional 10 per cent tariffs on the bloc without exception, it is time the BRICS nations thought about how to bring down dependence on trade with America by expanding the trading among themselves.

“MAGA” may have a magnetic appeal to Americans, but the rest of the world can also take it to mean “Make All of them Grovel Again”, which is what Trump is aiming to do with his tariff regimen that is supposed to correct the historical imbalance in trading with the USA. And those struggling to set things right regarding trading with Trump’s USA would have calculated by now how much their economies would be affected by the sacrifices to be made to avoid steep tariffs beyond the base 10 per cent that Trump had proposed.

Geopolitics of the world has taken such a turn in the three years since Russia invaded Ukraine to show territorial integrity can be breached with impunity that security has become too complex as to render even the most powerful nations helpless in dealing with it. Approaching international trade with an open mind on diversifying is going to be the priority that nations must look at in these turbulent times.

The clock is ticking on the expiration of the 3-month pause on higher duties in trade with the USA, with tariffs to kick in on August 1. This is no time to say it is each nation for itself against a transactional US President whose business acumen may have shaped his brinkmanship with high tariffs to bulldoze trading partners to fall in line. As the Prime Minister declared in Brazil during the summit, it is time to reset many things, including security against terrorism and the global trading order.

India was in no position to sign a comprehensive trade deal with the US under deadline pressure, not if it meant that the nation would have to sacrifice the interest of its millions of farmers, especially that of around 80 million dairy farmers whose average holding may be 2-3 cows. Their fate can be imagined if the sector were to be opened for American dairy products to be flown into Indian urban markets.

Any hurried signing of a trade deal when Trump is holding a virtual gun to the heads of leaders of the rest of the world may lead to disastrous consequences. Politically too it would have invited reprobation if a hatchet deal were to be signed when so much is at stake. Not only would the opposition see it as grist to the mill for slating the government but the members of economic wings of the ruling BJP themselves would have turned critics of any hurried deal.

At best, a limited deal that does not deal with agriculture, dairy and GM crops right now can be the route out to meet the high tariffs deadline. Even so, it is time India parlayed its strengths into making trade deals with several other nations to bring down the pressures on trying to save the trade with the US, with its succulent surplus every year. To look for sources to diversify and move away from dependence on satisfying Trump’s whims would have to be India’s approach.