As the global trade system crumbles in the face of Trump’s whimsies, what should India do?

We are living in tumultuous times for the global economy. The rules that have governed global trade since the end of the Second World War, first in the market economies of the Global North and Global South and, then following the demise of the Soviet bloc in the entire world, are effectively dead.

The era of “free trade” (as it was defined by the US and its allies) ended on “Liberation Day” on April 2 when US President Donald Trump arbitrarily drew up a new regime of import tariffs or customs duties that America would henceforth impose on all imports.

Trump’s flip-flops since then – now exempting some sectors from tariffs, now increasing rates for China, then pausing implementation – do not matter. The world’s biggest economy is struggling to retain its global hegemony. Domestically it is struggling to deal with the widening inequality that has brought a billionaire to office on the promise that he will bring hope to those disappointed by the American Dream.

In this situation, it is difficult to see the US going back to what it used to lecture to the world for decades as “free trade”, built on a platform of low tariffs that all countries were expected to move...

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