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The Hindu
14 hours ago
- Politics
- The Hindu
V.S. Achuthanandan, a leader of the masses with no parallels
When I first saw him, comrade VS was addressing a mammoth party rally at Fort Maidan, Palakkad. In his own characteristic style of mixing unusually long and short sentences and gestures using his whole body, he was elaborating on the suffering of local pepper cultivators due to the price crash as a consequence of GATT (General Agreement on Tariffs and Trade). Since then, I have had many opportunities to watch him from a distance and later in a more direct manner. Like his speech, the perfect fit white jubba was also his trademark. My first interaction with VS was in 2000. As the State secretary of the Students Federation of India, I was in the midst of an indefinite hunger strike at the gates of SN College, Kollam. VS visited me, enquired about my health, and fondly advised me to take care. He was the convener of the ruling Left Democratic Front and we often had to discuss issues related to education with him. Some of his great qualities that I have observed are his patient listening and sharpness in quickly identifying issues and offering solutions. In the 2001 Assembly elections, comrade VS' candidature was announced from Malampuzha, Palakkad. His opponent was the then Kerala Students Union president Satheesan Pacheni. VS summoned me to our party headquarters and instructed me to concentrate on Malampuzha. His rationale was that as the opponent was a student leader, I should be present in his constituency to mobilise the youth and students for electioneering. It proved to be a unique opportunity for me to work closely with him, who subsequently became the Leader of the Opposition. Later, on one of his visits to Palakkad, I was assigned by the party to accompany him. He had a habit of having an early dinner, which the organisers, the Indian Medical Association, had arranged in a restaurant. I had never used forks before, and was trapped in a dilemma about the related etiquette. When I saw VS push aside his cutlery and start eating with his hands, I was relieved and delighted to follow suit. During his tenure as the Leader of the Opposition, his image of an 'apparatchik' created by the media was transformed to that of a popular communist leader with mass appeal. It is very uncommon for a leader to undergo a transformation like this in their late seventies, and it was a testament to his amazing ability to adapt to changing circumstances. Comrade VS was moulded as a leader in the second half of the 20th century, when television was not at all a factor. Despite this, he quickly adapted to the complexities of the televised era with an enviable ease. He had a great sense of humour. Once I introduced one of our SFI colleagues who was sent to Delhi to work at the national level, VS asked him if he knew Hindi, and when he answered that he did, VS replied in his characteristic demeanour 'so when someone speaks to you, you can understand the language is Hindi, right?' We all burst out laughing. When I was a Member of Parliament, VS was Chief Minister and he used to take me to meet with Union Ministers. One such memorable meeting was with the then Finance Minister Pranab Mukherjee. Senior leaders like Pranab Mukherjee had great respect and consideration towards comrade VS. By then, I had come to notice how he was a surprising personality for leaders and journalists in Delhi for his vigour, energy, dedication, and steadfastness. His strict adherence to his diet and exercise, even in his 90s, was a valuable life lesson for youngsters like us. Comrade VS was a great communist and a leader of the masses who could strike an emotional bond with the common people. His unparalleled revolutionary life spanning over a century has come to an end. Red salute comrade VS. (The writer is Excise Minister and State committee member of the CPI(M))
Irish Times
3 days ago
- Business
- Irish Times
When I was ambassador, Trump's advisers still had sway. Now the EU has to be ready to hit back hard
'God be with the days' is a phrase I often heard older people use during my early years. As a student of history, I am sceptical of nostalgia for bygone eras that were usually much less glorious than imagined, but the current EU-US impasse over tariffs does make me pine away for the old world of multilateral trade talks. I remember being involved with the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) negotiations when that diplomatic circus came to Brussels during my time there in the 1990s. Backroom deals were hammered out during all-night sessions. The Uruguay Round took eight years to complete. When it concluded in 1994, the result was a freeing up of world trade, a general reduction in tariffs and the setting up of the World Trade Organisation (WTO), of which Ireland's Peter Sutherland became the director general. What a different world we now live in. The decades-long liberalisation of trade has gone into sudden and sharp reverse . US president Donald Trump 's ambition to conclude 90 agreements in 90 days will clearly not be realised, but the world we knew in the heyday of the WTO may not be recoverable. Economic nationalism is now the order of the day in the United States, and others may be tempted to follow suit. Trump's approach echoes a wider mood among Americans. Trade negotiators usually spend their time mulling over such things as commodity codes, market access and non-tariff barriers to trade. They tend to run dogged negotiating marathons rather than blue riband sprints. It can take years to work out the details of a trade agreement. READ MORE The European Commission has vast experience of handling trade negotiations as it is one of the commission's exclusive competences. Its counterparts across the EU-US negotiating table are the permanent officials and political appointees at the office of the US Trade Representative. In a normal world, those two teams would have sweated out a set of compromises in the confident expectation that their political masters would eventually give a 'thumbs up' to the results of their labours. Not so now. The upheavals of Trump 2.0 may end up doing the EU a favour. Although reduced reliance on the US market would represent a painful transition, it may be a necessary one I am sure that the two teams have explored solutions across the full range of trade-related issues. EU negotiators will have come armed with a set of concessions designed to appeal to the Americans. Sadly, however, this is not a conventional negotiating environment as Trump may well choose to disregard the advice of his negotiators. He enjoys an unmatched and unchallenged degree of authority. Last week's letter to commission president Ursula von der Leyen read more like an ultimatum than a negotiating offer. So where is this dispute headed? The second Trump term is a very different proposition from its predecessor during my years as ambassador in Washington. At that time, Donald Trump was a political neophyte. With the experience of four years in the Oval Office and time to reflect on what went right and wrong for him during Trump 1.0, he is now far more self-assured. His current team of advisers have less sway over him. Trump's belief in tariffs is not widely shared, but it is deeply held and long-standing. He is actually less ideological than many of his supporters, but is animated by a deep conviction that his country has persistently been taken advantage of internationally, and that his predecessors have been too pusillanimous to protect American interests. Europeans see things very differently, of course. They will point to the success of US companies in Europe and the profits they generate for their ultimate ownership across the Atlantic. [ Trump's 30% tariffs would effectively cut off EU-US trade, Sefcovic says Opens in new window ] Since the so-called Liberation Day on April 2nd, the EU has acted with a commendable restraint designed to avoid an escalation of the transatlantic tariff dispute. It has patiently deferred retaliatory action, even in response to US tariffs on steel and aluminium which have been in place for months now. Even after the missive threatening 30 per cent tariffs landed in Brussels, the commission's tempered response prioritised negotiation and presented its planned countermeasures as a last resort. [ Is Trump's tariffs plan working for the US? And where does it go next? Opens in new window ] It is genuinely difficult to predict how this will land, but an all-out trade war would be a mutually damaging outcome – one that both sides ought to be keen to avoid. The odds still marginally favour a last-minute agreement, but not necessarily by the August 1st deadline. Whatever the outcome, Trump will be keen to declare victory for his 'America First' policy. If agreement proves impossible, the EU will ultimately have no alternative but to hit back hard while probably delaying implementation in the hope that market reaction will soften Washington's position and obviate the need for full-scale retaliation. Whereas the threatened US tariffs are across the board, the EU's reaction will target products likely to ruffle feathers in Trump-supporting communities. Selectivity is the wiser course, but it does require choices to be made, and that poses a dilemma for a 27-member union. Each member state has its own priorities on what to exclude from the EU's retaliatory package. And the issue of transatlantic security, where the atmospherics have improved since the recent Nato Summit, will always loom over European calculations. I expect that consensus will develop around the commission's current proposal for a €70 billion tariff package on imports from the US. That would put the ball back in Washington's court, with unpredictable consequences. My sense is that the EU is reluctantly ready to face up to them. These unwelcome developments are especially problematic for Ireland , given our unusual exposure to the US market. Important Irish exports like butter and sprits could be badly hit right away. Pharmaceuticals are being dealt with separately by the US, but they are clearly vulnerable too. Irish-based tech companies may find themselves blown off course by tariff headwinds. The current standoff convinces me that the EU needs to work on building its own economic resilience. The upheavals of Trump 2.0 may end up doing the EU a favour. Although reduced reliance on the US market would represent a painful transition, it may be a necessary one and there are alternative avenues for European trade. Even if this impasse is sorted out, there is no guarantee that it will remain so. There's a new economic zeitgeist afoot and no going back, I fear, to those old days of predictable trade negotiations and their relatively benign outcomes. We need to brace ourselves for a rough ride and play to our strengths. Daniel Mulhall was Ireland's ambassador to the US during the first Trump presidency and is a consultant with Rockwood Public Affairs
The Diplomat
4 days ago
- Business
- The Diplomat
Trump's Tariffs and the Risk of Reverse Friendshoring
Under pressure from U.S. tariffs and protectionism, what if firms, rather than moving away from China, begin repositioning themselves closer to it? Over the past few years, the United States has embraced the concepts of nearshoring and friendshoring – relocating supply chains away from China and toward the U.S., its allies, or nearby countries. The goal was to reduce dependence on a strategic rival, strengthen domestic industry, and align supply chains with geopolitical partners. Initially, this strategy showed promise. Investments flowed into Mexico, Vietnam, and India as Washington offered incentives and business executives recalibrated risk maps. But now, with the resurgence of tariff wars and mounting protectionist pressure, especially under President Donald Trump's renewed rhetoric, this strategy faces a paradoxical risk: a reversal. In other words, what if companies begin to do the opposite of what the U.S. intended? What if firms, rather than moving away from China, begin repositioning themselves closer to it? There is a growing concern among multinationals that the U.S. market may become more volatile and less accessible if tariffs persist. If the cost of operating or exporting into the United States rises significantly, some companies might start to see Asia not only as a manufacturing base but as the main market to bet on. In this context, companies may decide to expand operations near China, taking advantage of mature supply chains and the opportunity to serve a vast, growing consumer market. Several cases already hint at this trend. One major firm that previously relied on U.S. ports to access North America shifted its operations to Canada to avoid compounded tariffs. Another company had invested heavily in Mexico as part of its strategy to reduce exposure to China. However, when Mexico was suddenly targeted by new Trump-era tariffs, the firm pivoted. Rather than using its Mexican facility to serve the U.S., it redirected its exports to Latin American and South American markets. The logic is simple: when the U.S. becomes a bottleneck, companies diversify away from it. The unintended consequence is a reverse friendshoring, one that pushes supply chains back toward Asia. This phenomenon is more than a tactical response. It could represent a structural shift in global trade. If U.S. tariffs become a long-term reality, many multinationals will strengthen their presence in Asia, including in China-adjacent economies. This would be a strategic setback for the United States, which originally aimed to 'decouple' from Chinese influence. It's worth remembering that this aggressive protectionism is not historically American. For decades, especially after World War II, the U.S. championed open markets, leading the creation of GATT, the WTO, and free trade agreements across the globe. It saw liberal trade as a source of strength and leadership. The shift toward 'America First' protectionism, especially under Trump, disrupted this legacy. And while some short-term political gains were achieved, the long-term costs, especially in credibility and stability, are becoming more visible. Protectionism may offer a temporary illusion of control, but in the long run, it risks pushing businesses away. If global firms come to see the U.S. as unpredictable or commercially hostile, they will turn to where predictability and demand still thrive. Asia, with its integrated supply chains and pro-business environments, becomes the natural alternative. But there's a deeper irony. By pushing companies back toward Asia, especially China, the U.S. may be reinforcing the very dependency it sought to undo. While relocating closer to China may offer efficiencies, it also strengthens Beijing's strategic hand. China has long made it clear: its goal is to make the world more dependent on it while reducing its own vulnerabilities. That's a dangerously asymmetric relationship. As Europe learned with Russian gas, overdependence on an authoritarian power can quickly turn into leverage used against you. This is why Southeast Asia and Central Asia are positioning themselves aggressively. Vietnam has already emerged as a winner of the China-U.S. trade war, becoming one of America's top trade surplus partners. Indonesia, Thailand, and Malaysia are rapidly improving infrastructure, workforce readiness, and regional trade deals like the RCEP to attract more industrial investment. Central Asian countries like Kazakhstan and Uzbekistan, long dominated by Russia and China, now see an opening. By offering access to emerging supply corridors like the Trans-Caspian route, they aim to attract diversified Western investment. In short, if the United States doubles down on isolation, others will gladly step in. The global gameboard is shifting. Reverse friendshoring is no longer a hypothetical – it's a scenario being quietly sketched out in boardrooms from Singapore to São Paulo. The question is no longer whether the U.S. can bring supply chains back home. The question is: will its current posture drive them even further away?
Yomiuri Shimbun
11-07-2025
- Business
- Yomiuri Shimbun
How Can the Free Trade System Be Saved From Crisis?
U.S. President Donald Trump's tariff strategy has thrown the world trade system into significant disarray. As a result, the free trade system is said to be facing a serious crisis. What exactly is a free trade system in the first place, and what specifically does it mean when people say there is a crisis? The world trade system was first supported by the General Agreement on Tariffs and Trade (GATT), which came into being under the post-World War II Bretton Woods system. Since 1995, it has been backed by the World Trade Organization, which replaced GATT. The GATT regime was led by Western countries, but emerging economies and developing countries joined the WTO as active members, enabling the organization's influence to spread across many countries and regions. A particularly important turning point for the WTO was China's accession in 2001. In the context of this article, the free trade system refers to the trading system that has developed since China joined the WTO. To be specific, it is a trading system that not only facilitates traditional trade between major countries — the selling and buying of final products and resources — it also drives global economic growth through the cross-border division of labor thanks to the supply chains stretching across the world. This environment features a complex global division of labor, as well as cross-border trade within enterprises and diverse networks of direct investment. U.S. journalist Thomas Friedman focused on this environment in his 2005 book 'The World is Flat.' Since China's accession to the WTO, the global economy has undergone a significant transformation, continuing to grow at an unprecedented speed. Based on the anticipation that emerging economies were likely to underpin global economic growth, the term 'BRICs' was coined to denote the economies of Brazil, Russia, India and China. The world economy's fast growth stumbled temporarily in 2008 due to the Lehman shock, but the 'flattening' of the world continued thereafter. In that time, the United States' view of China has changed. A senior U.S. government official told an international conference that American officials expected China to come closer to their way of doing things by joining the WTO, but it seems that China has made a U-turn midway. Protectionist policies have become evident in the United States after the inauguration of the Trump administration. But tensions between the United States and China — the world's No. 1 and No. 2 trading powers — had been apparent before that. In other words, the process of reviewing the flattening of the world economy had already begun. Increased trade liberalization seems to be a good thing for every economy in the world. However, nearly 30 years of dynamic growth in the global economy — the brisk rise of China in particular — has fostered an entirely different view within the United States. Over that period, the U.S. manufacturing industry was hit hard by the sharp increase in imports from China. This situation was analyzed by David Autor, a professor at the Massachusetts Institute of Technology, and others in their 'China shock' theory. Their analysis sent out shock waves among scholars who had advocated free trade. Areas exposed to fierce competition from inexpensive imports from China witnessed a significant increase in unemployment and a notable decrease in wages. Moreover, labor-force participation rates — the number of people employed and actively seeking employment as a percentage of the working-age population — fell conspicuously, with low-education, low-skilled workers hit particularly hard. Of course, advocates of the China shock theory do not dismiss the benefits of trade. But while the gains from trade tend to be thinly spread throughout society, the pain of trade is concentrated in certain areas and industries. Many people live their daily lives without feeling the gains from trade, but those who are compelled to feel the pain of trade strongly resent imports. This is why protectionism, which advocates trade restrictions from the perspective of political economy, tends to come to the fore even though free trade is desirable in economic theory. Post-Trump U.S. policy Many people may think that U.S. protectionism results from Trump's unique way of thinking. However, as pointed out by the China shock theory, the global trade system, which has developed over the past 30 years or so, has brought a greater shock to the U.S. economy than previously thought. There are concerns that the trend of protectionism will remain strong even in a post-Trump U.S. trade policy. Trump's tariff measures violate the WTO regime's two important principles — one that prohibits countries from raising tariffs and the other, known as the most-favored-nation (MFN) treatment principle, that bans countries from imposing discriminatory tariffs on certain trading partners. It is no exaggeration to say that these two principles have fundamentally supported the free trade regime. The United States has now broken these principles, which it should have supported. Indeed, the United States is endangering the free trade system. Proactive corporate activity is vital for a flattening global economy. How much should a company produce in which country? Which overseas companies should it collaborate with? In which market should it expand sales? Each company makes investments based on outlooks regarding these factors. Such decision-making inevitably requires an environment devoid of uncertainty. After a tariff has been decided, it should not be raised arbitrarily. Compliance with the WTO principles, in other words no increase in tariffs and upholding the MFN treatment, is a prerequisite for global corporate activity. The increase in import duties resulting from the Trump administration's tariff measures is having a major impact on immediate trade. This itself is a major issue, but aside from this temporary impact, there is one more concern that should be addressed. The concern is: to what extent will trade be affected in the medium to long term once we have an environment in which tariffs change frequently, embedding uncertainty into the trade system? As mentioned earlier, the flattening of the world has continued over the past 30 years or so, during which time the global economy has registered high growth. If the rise of protectionism sets back the process of such flattening, there will be a significantly negative impact on economic growth. The question then is how protectionist movements will spread in the post-Trump United States and other major countries. As explained earlier in connection with the China shock theory, the political and economic factors driving protectionism are deep-rooted. So, now that the United States has begun moving toward protectionism, it is not easy to stop it. Also, it is unlikely that we can expect any other country to replace the United States in leading the free trade system. That is all the more reason for major countries to first of all deepen their understanding about how enormous the economic costs of protectionism are. The debate over the China shock theory has shown that naive theories advocating free trade are not persuasive enough. So, what is required now is to make it clear how dangerous naive protectionism is. Motoshige Itoh Itoh is a professor emeritus at the University of Tokyo. He also served as a professor with the Faculty of International Social Sciences at Gakushuin University until March original article in Japanese appeared in the July 6 issue of The Yomiuri Shimbun.
Time of India
07-07-2025
- Business
- Time of India
India proposes retaliatory duties against US auto tariffs
India on Friday proposed imposing of retaliatory duties under WTO norms against the US tariffs on imports of auto parts in the name of safeguard measures. "The proposed suspension of concessions or other obligations would take the form of an increase in tariffs on selected products originating in the US," according to a notification of the WTO being circulated at the request of India. India has notified WTO's Council for Trade in Goods of its proposed suspension of concessions and other obligations under certain WTO provisions. "This notification is made in connection with safeguard measures extended by the United States of America on imports of automobile parts from India," it said. On March 26 this year, the US adopted a safeguard measure in the form of a tariff increase of 25 ad valorem on imports of passenger vehicles and light trucks, and on certain auto parts from India. These measures apply from May 3, 2025 as regards auto parts, and for an unlimited duration. The measures have not been notified by the US to the WTO, but are, in essence, safeguard measures. India has maintained that the measures taken by the US are not consistent with the GATT (General Agreement on Trade and Tariff) 1994 and the agreement on safeguards. As consultations sought by India on these tariffs have not taken place, "India reserves the right to suspend concessions or other obligations", the WTO notification added. The safeguard measures would affect $2,895 million imports annually into the US of the relevant products originating in India, on which the duty collection would be $723.8 million. "Accordingly, India's proposed suspension of concessions would result in an equivalent amount of duty collected from products originating in the US," it said. To ensure the effective exercise of its right to suspend substantially equivalent concessions or other obligations, the multinational body said, India has reserved its right to adjust the products as well as the tariff rates. agencies>
