When two elephants clash, the grass beneath them gets crushed. The United States and China are levying ever-escalating tit-for-tat tariffs on each other. President Donald Trump of the US is getting more and more aggressive vis-à-vis China, and China is responding with its “never yield” policy. Who knows what this spat will yield? What’s in it for India? Boxed into a corner, China is sidling up to India.

Trump had imposed 26 per cent of reciprocal tariffs on India this month, but has now waived them off for 90 days. When the tariffs came into effect, the Indian government said nothing, but the day they were waived, Commerce Minister Piyush Goyal and External Affairs Minister S Jaishankar said that India will not negotiate under gunpoint. China, on the other hand, had no such qualms. It levied retaliatory tariffs on the US almost immediately. President Xi Jinping of China has just visited South East Asian countries like Vietnam and Indonesia to rustle up support and to whip up anti-American sentiment. Who knows if he’ll succeed? India exports $85 billion of goods to the US. Further, India exports $110 billion of software services exports to the US, accounting for 54 per cent of India’s total software services exports. US exports to India are valued at a mere $42 billion, making the trade surplus heavily in favour of India. India however faces a trade deficit of $100 billion with China.........

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