For China to survive, the industry has to survive; it has to export 30% of the goods produced in China for the economy to remain competitive. China enjoys a significant trade surplus with the US with $425 billion exports.When you suddenly introduce tariff walls, it is a violation of the WTO’s most favoured nation (MFN) norms. But the Americans have made WTO dispute settlement dysfunctional. Now, let’s look at Trump 2.0. He’s already declared India as a Tariff King, so we will have to be disciplined with tariffs. But he has also said 60% tariff on Chinese imports and 10% on imports from other countries.My view is that big nations generally tend to settle the differences. If tariffs by Trump are going to be significantly high for us, then we have to negotiate with Trump.Santwana Bhattacharya: Can you really explain how we are going to deal with the Trump administration, given his anti-globalisation stance? Also, how are we going to deal with China?Whether Trump believes in globalization or not, it is his view. So, I will not challenge that. But I feel the world is increasingly getting closer thanks to technology. As far as bilateral relations between India and the US are concerned, we have a very strong relationship. We have close ties, not only through trade and investments, but also through technology. A lot of innovations in the US are driven by the Indian brainpower.Now, let’s come to the China question. Till now we do not know why China did what it did in Galwan in 2020. China is a big economy, it is going to impact the world in many ways. And whatever it does, it will impact the neighbourhood. But you cannot open up your economy if you don’t have peace on the border.Shahid Faridi: BRICS countries have decided to conduct their trade in local currencies. Do you think it can challenge the dominance of the dollar in international trade?Let’s look at the global trade architecture and the financial architecture. The global financial reserves that countries hold — 60% is in dollars. Then you have the next 15-20% in euro. Then you have the yen. Around 80% of the global merchandise trade is in dollars, Euro and other currencies account for only 20% of business. The weightage of dollars for the West is overwhelmingly high. To influence de-dollarization is not even remotely possible today.Santwana Bhattacharya: We have very deep trade relations with Russia and Iran. How do you think this trade situation gets balanced out and since Russia has raised a few issues, how do you think the West Asia conflict is going to impact our neighbourhood equations and trade?The West always perceives that India buying oil (from Russia) is fuelling the Ukrainian war. But I think we have to put this in perspective in bringing the truth out. Our dependence on defence imports from Russia is also very high — at 65%. You can’t overnight shift it. So, you have to see the overall situation evolving around us and take calls pragmatically.As for Iran, it is in a deep crisis. We’ll have to wait and watch because for us, Iran has another significant value — the Chabahar Port and the connection from Iran to the central Asian republics.
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