On 16 January 2018, Jindal Global Business School (JGBS) hosted a Public Lecture on “Trump Presidency’s Impact on US Trade Policy: Implications for India” on the JGU campus.
The Lecture was timely, topical, and relevant given the growing concerns of Indian businesses that are working with American businesses or have the US market as a substantial part of their operations.
The Lecture was conducted by Professor Jagdish Sheth, Professor of Marketing at Goizueta Business School, University of Emory, USA. Professor Sheth, a renowned scholar and internationally recognized thought leader, has published more than 300 research papers and more than 30 books on various disciplines and topics. His insights on global competition, strategic thinking, geopolitics, and emerging markets are widely followed, making him the most relevant speaker on this topic.
Introducing the eminent speaker and starting off proceedings, Dr. Tapan K. Panda, Dean, JGBS said, “This is a great moment for me personally and professionally, having come to know Professor Sheth many years ago during my own student days while referring to his research work. His credentials in helping countries and companies have been proven over his many years of teaching and consulting. His many awards, publications, public recognition, and membership of eminent associations are just some of the evidence of his caliber.”
Professor Sheth began his talk with a description of how geopolitics has radically changed in the past three to four decades. This period has seen the rise of China, decline of the British Empire, and creation of the EU, which was followed by Brexit and its implications. He spoke at length about the evolution of tiger economies like Singapore and China and how they leveraged inherent strengths for sustainable advantage.
To look at implications of the Trump Presidency, Professor Sheth clarified the demographic and social trends behind his election as the President and how his support influences his trade policy decisions. He also explained how, despite all the impressions President Trump creates of being simplistic and reactionary in his thinking, he is actually smart. How he has used established principles of Marketing 101 to get elected, including reaching out to neglected sections of society and selling the always loved story of the downtrodden defeating the powerful.
On global trade, Professor Sheth opined that “bilateral trade will dominate multilateral trade. Other countries are likely to follow the US’s approach towards foreign trade, making bilateral trade even more important. In India’s case, bilateral trade agreements like the Israel–India and Japan–India ones are a result of this. Moreover, this is natural because large countries anyway historically traded among themselves, with only raw material imports from smaller countries representing non-developed country international trade.” To illustrate, Professor Sheth shared the example of captive manufacturing represented by Foxconn. According to him, this case strongly shows how the evolving model has nothing to do with international trade, since an international firm manufacturing in China does not boost Chinese enterprise in any way.
On the implications of President Trump’s approach to international trade, Professor Sheth speculated that “China is too smart and has too much at stake to aggressively take on the US in its trade policy. Russia, the other international power, is too involved with the Middle East due to its reliance on oil revenues. This leaves Asia ex-China as the battleground for trade wars and India is squarely in the middle of what will come.”
Implications for the US due to these changes will be tangible, according to Professor Sheth. He feels low margin manufacturing work will get sold to Asia as has happened, for example, with IBM selling the Thinkpad brand to Lenovo. Enterprises in India should stand ready to capitalize on this opportunity like Chinese firms have. India’s global competitiveness otherwise suffers from drawbacks. According to Professor Sheth, Germany is perhaps the one truly export competitive, successful economy in the world. Comparatively, India suffers from many disadvantages that it needs to overcome in order to become competitive like Germany.
The Lecture clarified the history and the future of US trade policy changes for the participating audience and gave them a unique opportunity to clarify their questions with an eminent global thought leader.