By Hiren Gohain
Frequent shocks from Donald Trump’s apparently wild and wayward decisions, contrary to all received wisdom and established practices of international relations, seem to have so benumbed observers and policy experts that they have been reduced to declaring Trump a mad maniac with whom no reasoning is possible. But after observing his acts and opinions, one may argue that, to borrow from Shakespeare, “there is a method in his madness.”
After all, 45 p.c. of American voters have voted him to power, and there are people in the establishment, in the administration, and in politics who are happy to serve under him.
Consider the recent deal (Trump’s favourite word) thrust down India’s throat with the threat of bringing to a grinding halt a big chunk of Indian small and medium manufacturing industries. India evidently buckled under the pressure. It was forced to concede that it would buy £500 billion of American goods. Now that specifically included agricultural goods, which would certainly hit our farmers hard. But obviously, that does not cover the entire amount.
Now, American manufactures constitute a small part of its exports. Back in the fifties and sixties of the last century, booming American plants were producing half the exports of the whole world. Now that has been reduced, inasmuch as services make up one-third of all exports and solid goods have registered a decline. It is China today that is playing the same role as American industries did in those days.
But America still has an advantage in the latest high-tech products like AI and robotics. Its biggest producers, like Elon Musk, Mark Zuckerberg, and others, are Trump’s closest advisers. But they still have a narrow market, which receives protection from the economic sovereignty of once colonised countries. Since they played a big part in seeing him through a fraught election, he is obliged to treat their demands on a priority basis. And so he has done. Doubtless, a considerable part of the deal with India would be composed of such ‘knowledge-based’ industrial products.
That explains the extraordinary publicity given to the recently concluded GLOBAL AI SUMMIT, and the gloating hype about India being the ‘Vishwa…’
However, given the logic of imperialism, it is unlikely that the fillip to production and productivity given by AI will result in a fall in prices of goods in general demand. The hefty royalty, as well as other possible costs like initial installation fees, will most probably be passed on to the final consumer, raising prices further. The monopoly ownership by big business and government will also probably lead to attenuation of customer as well as civic rights. This development, unfortunately but predictably, increases imperialist influence on the economy and politics of our country.
The speed and alacrity with which such an event was organised within days of the signing of the Indo-US trade deal arouse some suspicion that the Modi government was hustled into holding it. Whether Trump’s repeatedly muttered threat that he could destroy Modi’s career at any time he chooses is true is quite another story.
I can’t make out what Youth Congress demonstrators were shouting about, but everyone, up to learned courts, is saying it is a disgrace to the country. But all this noise covers up the real and mortal shame during the event: the showcasing of a second-rate Chinese toy, a robotic dog, as a specimen of India’s prowess in AI and robotics. I am sure any IIT could have put up a much better show if it had been given sufficient notice. But there was little time. Everything was to be done to meet Modi’s impetuous demand. Trump’s style leaves no time for such considerations, as if there is no other option.
The logic behind Trump’s ‘go-it-alone’ policy is revealed in the choice of his contemplated objectives. He wants, for his new capitalist cronies, monopoly control over sources of rare earths, manufacturers of semiconductors, and the most common fuel driving modern industries—oil. Plus a prostrate market in the targeted country. As a consequence of such aims and methods, he is driven to back an aggressive Israel, which is expected to keep the oil routes open and browbeat countries that might revolt against American dominance in the Middle East. The current threat of all-out war against Iran is again in defence of Israel and of American stakes in Iranian oil. The aborted but once dangerously close seizure of Greenland also proceeded from the same logic.
These are immediate tactical issues, but the long-term strategy has roots in the familiar ground of imperialism. However, abandoning the orderly ‘rule-based’ system of yesteryears, Trump has revived the ‘gunboat diplomacy’ of an even earlier colonial era. Buoyed by the knowledge that it has the world’s largest and most advanced weaponry, and an army kept in readiness to spring into action at a moment’s notice, America under Trump tends to think like the mafia dons of thrillers and films: “I am going to make an offer they cannot refuse!”
The big idea, the contribution of Trumpism, is to hog the lion’s share of imperialist loot under the banner of international trade by systematic use of threat and force. (Cont.)
Trump, like many of his countrymen, is harking back to the good old fifties of the last century as typical of American ‘greatness’. At that time, GDP of the United States was growing at the rate of 3–7%. In the next decade, despite recessions, the ratio of investment to GDP was 24%. Today, it is between 15% and 16%. That includes both national and American imperialist capital’s share.
Since profit is the crux of investment decisions, American imperialist capital might invest more on foreign soil than at home, and moreover plough back the profit abroad too. Besides, sharing the imperialist ‘super-profits’ with labour also made for a substantial rise in wages in those days. But since then, there has been a striking decline in real wages. While productivity has increased by 74.4%, wages have risen by only 9.2%. The grim stagnation in workers’ wages may be gauged from the fact that while back in 1960 those in the highest salaried group used to receive, on average, a pay packet 24 times that of the average worker, by 2025 the difference has risen to as much as 262 times. (All figures culled from the internet.)
The situation has imposed on the government the release of funds for massive social security measures, reminding us of the GOI’s scrambling to hand over large amounts of cash under various schemes with fancy names to workers. But such measures, designed to blunt or lull popular fury, are hotly denounced by pro-capitalist right-wing journalists and think tanks as freebies and unearned income. They demand a ‘level playing field’ between ‘privileged’ workers and hard-working businessmen. (Cont.)
As long as the capitalist class is absorbed in activity to capture the national market and consolidate its power over the state apparatus to ensure policies in its favour, its commitment to nationalism is total. But when competition becomes intense and lowers the rate of profit, it starts thinking beyond national borders and exporting capital to maintain and raise profit margins. Correspondingly, its volume increases and the rate of exploitation on foreign soil also rises to deadly levels. This trend is accompanied by the transformation of nationalism into envenomed chauvinism and racism in support of imperialist capital, partly offsetting lukewarm investment at home and stagnation in productivity.
By the time we reach the stage of a neo-liberal economy, with transnational corporations and the increasing role of phantom financial production and profit, the urge to promote the growth of the national economy and raise productivity at home slackens. Profits are redirected to other regions rather than home as investments. Hence, in terms of national income and gain, the data appear rather listless and discouraging.
In the nineteen fifties, the USA actually accounted for 40% of the volume and value of world trade. By the nineteen eighties, it had slid down to a little above 24%, and by 2024 it had come down further to a little over 15%. China has overtaken it as the largest exporter of manufactured goods. It still remains the biggest importer of goods from other countries, and the volume of such imports amounted to a massive figure, £4.11 trillion in 2024. But the catch is that this has also been accompanied by serious trade deficits, which by 2024 had grown to £911 billion.
Partly, the deficit seems to be caused by tax-free imports like minerals and oil from African countries, which perhaps stem less from benevolence than from making such raw materials cheaper for American industry.
The huge trade gap, as well as state expenditure on social welfare programmes, have resulted in steadily rising national debt. At present, the ratio of national debt to the country’s GDP is 120%.
These figures have fuelled mounting anxieties about an epochal decline of the American economy and stagnation in the condition of the so-called middle class—actually its working class. 40% of American households today are in a debt trap they are unlikely to overcome.
Trump’s reading of the situation echoes these popular anxieties, and he is taking peremptory steps to reduce government expenditure by blunt and shocking refusal to honour long-term commitments and traditional responsibilities of the state. He is arbitrarily annulling many earlier obligations to other states, insisting on brand new ‘deals’. And if other states resist, he confronts them with punitive measures or plain military threats.
All conventional, time-honoured policy frameworks and customary strategies, which have done duty so far in order to avoid raw conflict, have been contemptuously junked. It is indeed as if the new American doctrine is the familiar law of the jungle: “might is right.”
Thanks to its superiority in arms, other countries are loath to offend it, but also wary of the one-sided ‘deals’, even when sweetened by fulsome praise of the victim.
No doubt, this approach—unless undone by some yet unforeseen development—is leading to extraordinary volatility in the world situation and the defeat of all calculation and prediction in world affairs. An expected crisis of capital, but exacerbated by the personal interventions of a dangerously unpredictable leader of a ‘great’ power.
Hiren Gohain is a political commentator
25 February 2026
Source: countercurrents.org