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International Economy

After tough talk on trade, Trump doesn’t follow through at the G20 Summit

The yearly edition of the G20 summit or the group of 20 nations is currently underway in Osaka, which is the cultural and economic hub of Western Japan. The G20 summit is an annual gathering of the heads of 19 strongest economies plus that of the European Union, which together control 80% of the global GDP and two thirds of its population. Its primary aim is to promote international financial stability.

While at the top of the agenda is the ongoing trade war between China and the United States, the world’s two biggest economies, India has an important part to play and must appropriately express its concerns, especially considering the recent rhetoric that Trump is taking against India concerning trade and tariffs. We must be careful that we don’t fall in the same boat as China and find ourselves at the receiving end of a barrage of trade restrictions which could affect our economy negatively.

The two day summit kicked off today and Prime Minister Narendra Modi met his American counterpart Donald Trump on the side lines of the summit for a discussion on wide ranging issues.

Let’s not forget what Trump has been saying about India and what he expects from us leading up to the all important summit.

Trump, on Thursday demanded that India should withdraw its retaliatory tariffs imposed on the US, calling them “unacceptable” in a stern message that seemed to imply trade ties between the two countries are fast deteriorating. Let us recall that New Delhi has slapped higher import duties on 28 US products in retaliation after the US scrapped trade privileges for India under the Generalised System of Preferences (GSP) Program which allowed India to sell goods worth $ 5.6 billion duty-free.

There are also differences between the two countries on data localization – Our government demands that data generated in India must be stored within the country, which is not looked upon favourably by America.

Keeping this in mind the meeting between Trump and Modi was expected to be tense. However, less than 24 hours after tweeting a strong complaint about India’s trade policies, Donald Trump did a complete u-turn and in his meeting with Modi made conciliatory comments about the need for close bilateral ties. Trump stated that relations with India have never been better than it is right now. He further went on to say that his country is doing some very big things with India in terms of trade and manufacturing.

The agenda for the two leaders included discussions about the recent problems in Iran, 5G telecom technology and Chinese equipment maker Huawei and bilateral and defence relations.

 

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