PARAGRAPH OF THE DAY –
Disruptive Mr. Trump
This week has seen rounds of tit-for-tat tariffs between the U.S. and China, set off by U.S. President Donald Trump levying import duties of 25% and 10% on American steel and aluminium imports, respectively, in early March. Mr. Trump, who has repeatedly used the U.S. trade deficit of over $500 billion as a barometer for the country’s lot in the international trade order, has railed against the U.S. being treated “unfairly” by its trading partners, often singling out China. While it is true that China produces approximately half the world’s steel and that the European Union, India and other countries have complained about international steel markets being flooded with Chinese steel, only 3% of U.S. steel is sourced from China. Interestingly, among those exempted from the tariffs are Canada and Mexico, top sources for U.S steel imports. Mr. Trump has linked the threat of tariffs to the North American Free Trade Agreement, a trade deal among the U.S., Canada and Mexico that Mr. Trump has pried open for renegotiation. Earlier this week China retaliated with tariffs that would impact $3 billion worth of American goods. This was followed by the U.S. proposing tariffs on more than $50 billion of Chinese goods, including in the aerospace, robotics and communication industries — the outcome of an investigation of several months into whether Chinese policies were placing unreasonable obligations on U.S. companies to transfer technology and hand over intellectual property while setting up shop in China. Beijing responded with a second round of proposed tariffs impacting a similar value of U.S. imports into China. Mr. Trump has now asked the U.S. Trade Representative to examine if an additional $100 billion worth of goods can be taxed.
Since the proposed tariffs have not kicked off, there may be room for negotiation. The economic ties between the countries are deep; China holds some $1.2 trillion in U.S. debt, and it is in everyone’s interest to avoid escalating matters. However, the larger cause for concern here is that Mr. Trump continues to undermine the World Trade Organisation and the international world trade order, now that it has served the West well and developing countries are in a significantly stronger position than when the WTO came into existence in 1995. Mr. Trump has pulled outof the Trans-Pacific Partnership, is pushing changes to NAFTA and has withdrawn from the Paris Agreement to combat climate change. While large-scale protectionism and unilateralism may please some of Mr. Trump’s constituents in the short run, undermining existing rules arbitrarily serves no nation, including the U.S., in the long run. In the current climate, it is therefore especially important for India to be a good steward for responsible globalisation.
WORDA AND MEANING –
Tit for tat
Meaning: Actions done intentionally to punish other people because they have done something unpleasant to you.
Example: “I noticed she didn’t send me a card – I think it was tit for tat because I forgot her birthday last year”
Meaning: Begin a journey.
Example: “They set off together in the small car”
Synonyms: Leave, Depart.
Meaning: Impose (a tax, fee, or fine).
Example: “A tax of two per cent was levied on all cargoes”
Synonyms: Impose, Charge.
Meaning: The amount by which something, especially a sum of money, is too small.
Example: “An annual operating deficit”
Synonyms: Shortfall, Deficiency.
Antonyms: Surplus, Profit.
Meaning: Complain or protest strongly and persistently about.
Example: “He railed at human fickleness”
Synonyms: Censure, condemn.
Meaning: To choose one person or thing from a group for special attention, especially criticism or praise.
Example: “It’s not fair the way my sister is always singled out for special treatment”
Meaning: Fill or suffuse completely.
Example: “she flooded the room with light”
Meaning: Free (a person or organization) from an obligation or liability imposed on others.
Example: “They were exempted from paying the tax”
Synonyms: Free from, Not liable to.
Meaning: To get, separate, or ferret out with difficulty.
Example: “We finally pried them away from the TV”
Meaning: Negotiation of something again in order to change the original agreed terms.
Example: “They demanded renegotiation of the treaty”
Meaning: Make an attack in return for a similar attack.
Example: “The blow stung, and she retaliated immediately”
Synonyms: Respond, React.
Meaning: An act or course of action to which a person is morally or legally bound; a duty or commitment.
Example: “I have an obligation to look after her”
Synonyms: Duty, Commitment.
Meaning: Become very angry; suddenly start an argument or fight.
Example: “I don’t want her kicking off at me again”
Meaning: Increase rapidly.
Example: “The price of tickets escalated”
Synonyms: Mount, Surge.
Meaning: Withdraw from an undertaking.
Example: “He was forced to pull out of the championship because of an injury”
Synonyms: Withdraw, Resign.
Meaning: On the basis of random choice or personal whim, rather than any reason or system.
Example: “Recurrent infection is arbitrarily defined as three or more infections a year”
Meaning: A person whose responsibility it is to take care of something.
Example: “Farmers pride themselves on being stewards of the countryside”