Transcription
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As we are watching it, Donald Trump has probably already finished meeting the European leaders. The entire gaggle of European leaders who collected there like the Indian Maharajas and Rajaras and Nawabs would do when the monarch came visiting from London. It's a bit like that, all these European leaders there. Trump must feel maha important.
Now, behind all of this, behind all of this, there is something called the madman theory. And that is something that's been used about Trump often enough, that he pretends to act like a madman, and he's so convincing that he is actually mad, and he can do mad things that you concede to too much that he wants. That's how he gets a lot of his demands accepted without even bargaining or without even giving anything in exchange. That's his method.
Now, if he personifies the madman theory, what if we told you that there is another man who's behind this madman theory? So, a madman behind the madman theory, that is a 75-year-old called Peter Navarro. See his picture. Peter Navarro, who is the White House Council for Trade and Manufacturing. So, a very important person now, when Trump has made trade center stage to all his diplomacy and strategic moves.
Do you remember his face? You might remember his face talking to Caitlyn Collins, the White House correspondent of CNN, on the lawns of the White House, where she asks him, "How come you put tariffs, additional punitive tariffs on India, but not on China, although they are also importing Russian oil?" In fact, more Russian oil. And he gives some roundabout explanation by saying, "Oh, but with the Chinese, there are other issues, and we already have 50% tariffs on them." 50%? Henny, it's 30%.
But Peter Navarro is not confused by facts, ever. Or I would not say, I would not call him the madman behind the madman. He says also, in the same couple of minutes, that India is also the Maharaja of tariffs. So, he's got a bee in his bonnet about India. Now, I don't know where this is coming from. Is it coming from his heart? Is it coming from his head? Is it coming from someplace else? Or is he just being the madman behind the madman?
Now, just so that you don't think that I am overreading this, or I'm overstating this, see this article. Short article that he's written in the Financial Times. That article got published today. There he makes his case for Trump's punitive, additional punitive tariffs against India. 25% punitive, in addition to 25% already, becomes 50%. Then there is some chamota tariffs here and there. So, for many goods, it becomes about 52%, 53%, 54% like that. So, about $50 billion worth of Indian exports to the US have effectively been priced out of that market. And that affects a lot of people, and a lot of poor people. For example, a lot of people in the textile and garment industry, a lot of people in the fishing industry. It affects greatly hosiery, knitwear, gems and jewelry, diamond cutters, all of those people. So, it actually threatens tens of lacks of jobs in India. In fact, I would say several millions of jobs in India. That's happened. He's made a case for that in this short article for the Financial Times, from which I will tell you a few highlights.
So, you understand his mind, or at least you understand where he's coming from, because that will also give you an idea, or give us an idea, as to where Donald Trump is coming from. Because this is the poison gas that some people have been spreading, obviously, in the Oval Office. Poison gas of ideas, particularly as far as we are concerned, concerning India. Because we have to first focus on what's of the greatest concern to us in India. And he is obviously, if you read this article, you will see it on your screens. I will share a link with you. FT.com is paywalled. It's quite a tough paywall. You might still want to check it out, because this gives you a reading of his mind.
So, what's he saying? What's he saying? He says, "India's oil lobby is funding Putin's war machine. That has to stop." That's the headline. "India's oil lobby." So, he does not say government of India. He does not say an Indian company or a bunch of Indian companies. But very interestingly, and that's also the headline in FT, he says, "India's oil lobby." Now, you would have thought, what is India's oil lobby? Because he's talking about refiners. A lot of India's refining is done by the public sector, government companies. There are, however, two very big companies in the private sector. One is Reliance, and the other is Nayara. Nayara is what used to be Essar Oil. Then, as the Essar group got into a real struggle with repayment of their loans, they sold Essar Oil. And a consortium of companies that included, or actually that was led by Rosneft, the Russian company, they bought the Nayara oil refinery. That's also in Vadinar in Gujarat. Now, these two are the big private refineries in India.
But when you read Navarro more carefully, it looks like he's attacking a particular Indian business house. Because he goes on to say, and I'm quoting some lines from you. First of all, the headline is, "Indian oil lobby funding Putin's war machine. That has to stop. Its dependence on Russian crude undermines the effort to isolate Moscow." That is India's dependence on Russian crude, says, undermines the efforts to isolate Moscow, which is actually simply because China is buying a lot more oil than India does. Europe buys a lot of gas from Russia. In fact, pays a lot of dollars to Russia. But once again, I told you earlier, Navarro is an ideological guy. He's an ideological guy. He's not to be confused by facts. I'm repeating that description. I might repeat it again, because that is the nature of the beast. I don't mean any insult there. That is just a metaphor. Sorry, Mr. Navarro. I did not refer to you as any of that, because tomorrow you will have Donald Trump to put 300% tariffs on me, maybe driving to work. So, let me get that clear.
He goes on to say, "Here is how the math works. India's oil math. India's Russian crude math. American consumers buy Indian goods. That gives India trade surplus." He says, "Up to $50 billion, right? That money, those dollars, India uses to buy Russian crude. Indian companies used to buy Russian crude, discounted Russian crude. Then they refine it and resell it across the world." And his exact words, "It is then refined and resold across the world by Indian profiteers, Indian profiteers in league with silent Russian partners." And he says, "While Russia pockets the hard currency to fund its war machine in Ukraine, and as Russia hammers Ukraine with Indian money funded by Indian money, America, Europe, American and European taxpayers pay up tens of billions of dollars for Ukraine's defense." So, once again, he's putting the monkey entirely on India's back. There is China, there is Europe. Forget all of that. He's chosen his target in this case. In fact, if you read this article, it's a 700-word rant, R-A-N-T, in all capitals. It's also appeared today. That is the day when Trump will meet these European leaders and Zelensky. This is also the day when our Prime Minister Narendra Modi and Vladimir Putin have had a phone call, where Vladimir Putin has briefed him of what happened in Alaska and what lies ahead. It's also the day when the Chinese foreign minister, and much more very powerful person in Chinese hierarchy, Wang Yi, has arrived in Delhi and has just met S. Jaishankar. So, it's a very important day, very important timing that he's chosen to put out this article.
Then he says, "Meanwhile, while all of us, America, Europe, are paying tens of billions of dollars of taxpayer money to defend Ukraine, as if India is financing Russia, as if India asked Russia to invade Ukraine, and without India's money, Russia's war will not last." In fact, it's very flattering for us Indians, maybe that's one indication that we truly already become a great power. That's sarcasm. It's important these days to give sarcasm alerts, or people don't have a sense of humor, and it can cause problems.
"Meanwhile," he says, "India keeps slamming the doors on American businesses, American exports, using high tariffs and trade barriers." Meanwhile, more than 300,000 soldiers have been killed in the war in Ukraine. Right. NATO's eastern flank is exposed. Hello. I thought Americans were not worried about it. And Trump, Trump's been saying that Europe should strengthen itself, buy some weapons from me and protect yourselves. But now he's shedding tears over NATO's eastern flank being exposed. And he says, "The West foots the bill for India's..." and mind you, underline these words. See this on your screen, just this line. "Meanwhile, the West foots the bill for India's oil laundering." Right? Money laundering. You had heard oil laundering. I have heard for the first time. I know at least my generation knows that until 1992 or thereabouts in India, our dry cleaners used petrol. So, when you got your freshly dry-cleaned clothes, they would smell of petrol. In a foreign elevator, when you entered a foreign elevator in New York, Geneva, London, any place, and you smelled petrol, you knew some Indians had been in this elevator before. Then, post-reform, we started importing new technology, dry cleaning machines which don't use petrol. So, when you say oil laundering, I think about that. But then, I'm also an old generation. This is his concept of oil laundering. Buy discounted oil, refine it, convert it into products, petrol, diesel, aviation turbine fuel, whatever, and then sell it for a profit.
Then he says, then he says, I told you it's a rant, because he goes from one to the other, and it's a very crisply written piece. He says, "India has meanwhile, India has the highest tariffs in the world with a dense web of non-tariff barriers." That is true, because you know, anybody who's dealt with Indian bureaucracy would know that it's tough enough to export from India. You have to fill some 40 forms to export from India. Some people have been talking about this on Twitter, saying, "Look, I had to just to export this much, I had to fill 41 forms, whereas when I export something from China, or I export something from Singapore, or some place, I just need to fill one form and give my bank documents, and I'm done." So, Indian bureaucracy is India's superpower, doesn't always work in India's interest. So, he says, then he says, "India has among the densest web of non-tariff barriers." I sympathize with him. And then he says, "With this, India's economic policy, trade policy is punishing American workers and businesses, leading up to $50 billion per year of surplus for India." And then he says, again his line, again his line, and he says, "Here's the kicker. India is using those US trade dollars to buy Russian oil." Right? He says, "India's oil purchases from Russia used to be 1% of its total oil purchases. It's gone to 30%. It's now importing up to 1.5 million barrels a day." And he says, "With this, India has become," and I quote from him, "a massive refining hub for discounted Russian crude, which it then refines, which it then sells refined products. It sells to it sells all over the world." And it says, "Because it's selling all over the world, all the while at the same time, India is shielded from sanctions under the pretense of neutrality."
He says, "In fact, in his estimate, this is nonsensical, because India cannot be exporting so much." India does export a lot of refined products, but India always exported a lot of refined products because too many Western countries, including America, do not have enough refining capacity. Now, because it was seen to be not that clean, it was seen to be too messy. So, refining, in a way, had been outsourced. The Chinese refine a lot and sell all over the world. I will tell you about that also as we go along. Right now, we are on Peter Navarro's rant, because he's the guy obviously behind. If you want to know Trump, you have to see Peter Navarro. That's the reason we have to understand more about him.
He says, he says that of the average of million and a half barrels that India imports every day, India imports almost 5 million barrels a day. India doesn't have to take barrels out of this Russian crude. India would in any case import that much crude. It's just that this might be a little bit cheaper. Not that much cheaper, a little bit cheaper. He says, "Of the one and a half million a day that India imports, 1 million only crude." As if crude comes, as if crude Russian crude comes watermarked. It's only Russian crude. India exports about 1 million barrel equivalent in refined products. For clarity, he says that India exports the equivalent of 1 million barrels of crude a day as refined petroleum products. And that, he says, is about half of all the crude India imports. I presume he means from Russia, because India's overall imports are about half a million barrels a day. And he says, and again, this is very loaded, he says, and I quote from him, "This goes to this profit goes to quote unquote politically connected energy titans, and also into Putin's war chest." And then he says, "This process by India, this phenomenon in India, is opportunistic, and it is deeply corrosive of all the global efforts being made, mainly Western efforts being made, to, to Russia's Putin's war economy."
Earlier, he called it oil laundering. Then he called India a massive refining hub for discounted Russian crude. Now he goes on to say, and I quote from him, "India is a global clearing house for Russian oil, which is otherwise embargoed." Which means which faces sanctions. And he uses it for high-value exports from which Moscow gets the dollars. Right? And then he again shifts. I told you, he's out, he's out delivering one-two punches at India. Because he first talks about crude imports. Then he talks about refined goods exports. Then he talks about India's trade practices. Now he's come to India's military imports.
And he says, "India greatly depends on Russia for its military imports. Between 2020 and 2024, 36% of India's defense imports were from Russia." Again, I told you earlier, he doesn't want to be confused with facts. The facts are that until 2014-15, 2016, I would say that 60 to 70% of India's defense imports were from Russia. So, that percentage, if anything, has fallen drastically. Meanwhile, what's gone up is France, Israel, and the US. Some of the big systems that you see in India, the C-17 aircraft, C-130s, M7 howitzers, the P-8I Poseidon naval anti-submarine warfare aircraft, those are very expensive, bought from Boeing. All of these are American. So, I don't know what he's complaining about. In fact, the percentage of India's imports from America has gone up, as the percentage from Russia has gone down. Nevertheless, he says, 36% still comes from Russia.
And he does acknowledge, while India is now buying from France, Israel, and America, those purchases, he says, come with many conditions, like manufacturing in India, co-manufacturing in India, and transfer of technology. And if the Americans were to do that, that technology can then go to America's rivals, particularly as India is cozying up to Russia and China. For heaven's sake, India has an active border dispute with China, with more than 100,000 Indian troops and heavy equipment lined up along the border, borders with China, or along the Line of Actual Control. And in fact, that is helping the American effort to militarily balance China, because China also has that many troops and that much equipment lined up there. That is keeping an entire Chinese theater force occupied. But that is not something that he would acknowledge.
And then he concludes with a line which is, which is a giveaway. He says, "If India wants to be treated as a strategic partner of the US, it needs to start acting like one." So, what is this? This is squeeze play. This is classical big power squeeze play, which is that, you know, either you are so-and-so's friend, or you are my friend. You choose one of the two. Those things happen usually in senior school, maybe in junior school also, but between nations, these things happen behind the scenes. That these things have now started happening in op-ed articles by important people, written by important people, in this case, Donald Trump's trade advisor. This also tells you how much diplomacy has changed and evolved. Now, this also tells you how people who believe in the madman theory, and people who are following the madman theory, by way of negotiation, by way of negotiation leverage, they use new methods. So, this is the new practice of diplomacy.
Now, a couple of minutes on who is Peter Navarro. Now, we know that America is not so angelic. They've themselves been trading with Russia. They've been buying palladium. They've been buying uranium. Some other things also. In fact, at Alaska, at the little press conference or statement to the press after their summit meeting, Putin said, and I quote from Putin, he said, "When the new administration came, that is the Trump administration, when the new administration came to power, the bilateral trade started to grow. It's still very symbolic. Still, we have a growth of 20%." But in any case, if you are that powerful, if the power equation is on your side, you can afford to be hypocritical.
Navarro himself is an interesting character. He's not spent 75 boring years. He's had a very interesting life. So, I will share with you two articles. One is from New York Times, written by Anna Swanson. That's a more recent article. And the other is by Annie Lowrey from the December 2018 issue of The Atlantic, because Navarro was an important figure even in the previous Trump White House. There also, he was a trade advisor, but he thought he would become chairman of the Economic Advisory Committee, but he wasn't made that. That job was given to a Goldman Sachs big shot, Gary Cohn, who Navarro used to see as a globalist. And Gary Cohn kept him completely sidelined. He was completely sidelined, but he continued to be a loyalist. So much a loyalist that when the Congress summoned him, in American usage, it's called subpoenaed him. When the Congress subpoenaed him to appear for evidence on January 6, 2020, storming of the Capitol Hill, he refused to appear for contempt. On the charge of contempt of Congress, he was given a jail sentence. So, last year, in July, he came out of jail in Miami after four months in jail. So, four months in jail for the sake of Donald Trump. That is his stamp of loyalty.
From there, Anna Swanson's profile on him tells us he went straight to Milwaukee in Wisconsin and appeared at the Republican National Convention and spoke there. And every word he said was cheered. And what did he say, among other things? He said, "They convicted me. They jailed me. Guess what? They did not break me." From that point on, because he had gone to jail, he became a top Trump favorite.
Now, why do I say he's had a very interesting life? He did not start out a Republican. He did not start out a protectionist. In fact, he started out as a believer in free trade. He comes from a working-class family in Florida. He's also sold, as I read on him, he sold coconuts and avocados as a youngster to make a little bit of money. Went to Tufts University on a scholarship, so was a bright student. Went to Harvard, got an economics PhD, wrote a book in 1984 in which there's a chapter praising free trade. Later, he said, apparently, that he changed his mind. Why? Because, he says, "I drank Kool-Aid." That's an Americanism.
Then, in the course of time, he became a protectionist. However, he was a Democratic Party member and a fairly significant one. He spoke at the 1996 Democratic National Convention. That was obviously the Clinton era. He spoke then. He also contested repeatedly for the mayor of San Diego and kept on losing. He worked as a professor. He taught as a professor in San Diego first, and then University of California at Irvine. So, a PhD, writer of many, many books, but somebody whose mind kept on evolving.
However, however, even when he was in politics and a Democrat, he was not Mr. Congeniality. As I read from this Atlantic profile, it says, it says, he lost each time, but won a reputation for being, and I quote from the article, for being, quote, "the cruelest and meanest son of a bitch that ever ran for office in San Diego." That, at least, is how Navarro himself put it in his political memoir, "San Diego Confidential." I told you, he's an unusual character. And that memoir, the Atlantic article tells us, is 200 pages of name-calling, score-settling, dad jokes, and dirty jokes. And his mayoral opponent in San Diego broke down in tears at a prime-time debate while describing the viciousness of Navarro's negative campaigning. He said, "These are crocodile tears." He was also seen to push a female aide aside rudely, and later he said, "She started it."
It was while he was teaching that he noted, apparently, that many of his former students had lost their jobs. And he started thinking about what might have lost them their jobs. And then he came to a quick conclusion. He has a Harvard PhD in economics, by the way. He's not an illiterate, Sacha. He starts thinking that they all lost their jobs because manufacturing shifted to China. So, he then starts internalizing the Rust Belt crisis in America. The Rust Belt is this entire area, sort of between the Midwest and South Atlantic, that is Pennsylvania, upstate New York, southwestern Wisconsin, Michigan, Ohio, Indiana, northern Illinois. Some definitions would also include Detroit there. This is the region of America which had heavy industry, which had steel in the past, and things made with steel. That's why the Rust Belt, because all of this declined as the economy changed, and America actually became a new economy country. So, 80-plus percent of America's economy now is services economy. That happens with all developed economies.
He, however, thought that too many Americans had lost their jobs because of imports from China and imports from other countries, and he had to fix it. And that's when he wrote three books about China. He's written many books about China, including books on investing. So, he says, "If it's trading in Brazil, you must buy Starbucks, obviously, because I presume coffee beans will become cheaper and Starbucks will make more profits." So, he's written stuff like that also. The kind of stuff these days that Instagram influencers do, buy this, sell that. He's done that kind of stuff. That's very popular in America. But he also wrote three books on China. One of these three books was "Death by China." And that sort of set his agenda, and the agenda for Trump as well. He had a co-author on that book, Greg Autry. This book was converted into a documentary that actor Martin Sheen presented. A lot of people criticized it, saying that this is just folklore, propaganda, scare-mongering, etc., etc. But certainly, a section of public opinion, particularly Republican public opinion, found juice in this.
Now, he has many critics. He has many critics. Edward Alden, senior fellow at Council on Foreign Relations, is quoted in the New York Times as saying, "He's the worst trade advisor any modern US president has ever had." And he also goes on to say that it has turned the US from being the world's economic leader into a rogue nation. Also, others are saying that he's just getting rewarded for loyalty to Trump. However, however, Navarro himself says that he did not go to jail for loyalty to Trump, that he went to jail only for loyalty to the Constitution.
His critics also include Elon Musk. He fought with Elon Musk. He called Elon Musk a car assembler instead of a car manufacturer. Basically, hinting at the fact that many elements of the cars that Elon Musk makes are imported, many of them from China. So, he said he's no car manufacturer, he's a car assembler. Elon Musk hit back, saying that he's dumber than a sack of bricks, Peter Navarro. And then he went on to add, maybe that's unfair to bricks. So, that's the character you're dealing with.
However, however, however, the man who wrote the book, who set up his agenda with a trilogy on China, with three books on China, with one, the most prominent one titled "Death by China," is now delivering, quote unquote, punishment on India instead of China.