The US administration recently announced a wide range of tariffs on the imports from the rest of the world, unbelievably, including its own traditional allies and western partners. To mark its strategic move, it celebrated 2 April 2025 as the Liberation Day, despite confidence in the global trading market suddenly plummeting and trillions of dollars being wiped out from the stock market across the world, including the US, which is believed to have lost at least $4 trillion in a single day. Both US and Australian dollars have fallen since the Liberation Day and share markets across the globe are struggling! Who has won?
The American people have been promised a great future ahead but also advised, in the meantime, to brace themselves during some difficult times ahead. As part of the US President Trump’s MAGA (‘Make America Great Again’) vision, the tariffs are aimed to attract investments from other countries, boost manufacturing in the US and generate jobs for the US citizens. The US government also wants to cut down monetary aid, which it calls ‘freebies’ to other nations.
Many countries, including China and Canada, have announced reciprocal tariffs on the US. Most other countries, including India, are still pondering over whether or not to reciprocate with matching tariffs on the US imports. Some nations are trying to negotiate with the US, hoping to get waivers, understandably, in return to greater concessions to the US.
Not only has the tariff war shaken the world, but it also has the potential to change the world order that emerged in the last century, after the WWI. The traditional allies of the US must be expected to feel nervously concerned by its protectionist move, which may force them to question the reliability of their traditional alliances with the US. Consequently, new alliances – both trade and defence – are expected to be forged across the world, outside of the US. In the end, will the tariff war hurt the US most and alienate it from the rest of the world, including its neighbours and allies?
Learning from the history, the tariff war may be followed a full-scale military war, as seen in the 1930s, especially if the tempers don’t cool down soon or if the US is not able to meet its expectations and objectives of the Liberation Day. One must ask why the US urged Australia to increase its defence funding to at least 3-percent of the GDP and its NATA / European partners to 5-percent of their GDP? Doesn’t all this look ominous, considering the Russia – Ukraine war shows no signs of ending, with NATO potentially jumping the war looking possible, and people in the European countries being urged to keep an emergency stock of three days in their basements / bunkers? Alarmingly, the Middle East too continues to be volatile.
From the point of view of a prospective great war, one must look at the position of the US’ allies. Australia is a part of both the AUKUS and the QUAD, whereas India is a part of the QUAD. However, unlike the other two partners of the US – the UK and Japan – both Australia and India are located well within Asia, and China is their largest trading partner. Both must be delicately reviewing their priorities and positions in the aftermath of the US’ tariffs, especially with the prospects of a great war, if that really happens. The greatest question before both is expected to be: “Can we rely on the US?” Understandably, no sane and responsible country would want to have a great war or be involved in one. So, what should they do?
The tariff war presents both Australia and Inda, as well as the rest of the world, with an opportunity to take a leaf from the US’ book and work to safeguard their interests.
After the completion of the Western Australia State Elections 2025, four weeks ago, which returned the Australian Labor Party (‘ALP’) to the government for serving the third consecutive term, the country is looking forward to the Australian Federal Elections 2025, scheduled on 3 May 2025. In Australia, State Elections are held every four years and Federal Elections every three years. The system is aimed to keep the elected governments on their toes, without allowing room for complacence. However, the aim is defeated if an elected government keeps winning more than two terms.
Democratically-held elections not only declare the successful candidates – those who receive the majority vote (more than 50-percent) and then sit in the parliament as lawmakers, they also provide the electors will several options, represented by various candidates, with varied skill sets and experience, some independent and some from established political parties. Ideologically, some of these parties may appear to be diametrically different but, sometimes, they may also carry a shared underlying vision, which, in an ideal world, must be to serve the people, albeit in different views. Well, that can be justifiably accepted so long as any political party does not ideologically wish to look after the interests of only some privileged individuals or only a particular community. Democracy potentially dies, albeit temporarily, if a powerful political party comes to power with an agenda of disproportionately advantaging some individuals (or a particular community) or subjugating other communities.
These days, the terms ‘leftist’, ‘rightist’ and ‘woke’ are commonly used to label the political parties, apparently mindlessly, without even knowing their origins, which can be misleading. For example, the term ‘Liberal’ in North America and Canada means a socialist, centre-left party. However, here in Australia, the Liberal Party is a centre-right party, apparently drifting further right only because the ALP, supposed to be a socialist centre-left party but, after mastering the game of electioneering, has consciously moved to the right of the centre, leaving the Liberal Party with not much room but to move further right, to distinguish itself from the ALP. Over time, many people have felt confused between the two, as they both appear to wear shades of the ‘left’ and the ‘right’, albeit with differing proportions. As such, many people look for other options, such as independent candidates and / or more centrist parties.
The readers must note that, based on the ‘primary’ vote, neither party can form a government on its own, as numbers matter. It is the ‘preferential’ system of voting here in Australia that helps the candidates to cross the 50-percent line and sit in the parliament. Thereafter, unless a party has more than 50-percent seats to form the government on its own, it is forced to rely on likeminded (or opportunist parties) and king-making independent candidates, to cross the line. It is for this reason that the Liberal Party traditionally makes a Coalition government with the National Party. On the other hand, the ALP also relies heavily on the essentially leftist Greens Party for preferential votes, which typically enables its candidates to cross the line. Although the ALP and the Greens have not historically formed a Coalition government, a future coalition government between them can’t be ruled out in case of a hung parliament.
It is interesting to note that, whilst the political partnership between the ALP and the Greens may help to keep the resultant of the two more or less at or near the centre, the resultant of Liberal National Coalition, supported by the preferential votes from the Australian Christians and / or the far-right One Nation Party, seems to be drifting further to the right and evolving as a more right-wing nationalistic option for the people, which may appear to follow recent trends in the US, the UK and many European countries, a trend that sees ‘immigration’ as a major issue in the country, one which is claimed to exacerbate the housing, job, inflation and living cost crises. In Australia, however, this claim is rubbished by the ALP and the Greens, who claim the immigrants make a significant input to the country, in all aspects of life, including economy and the workforce.
At this stage, not many people may know which party (or a coalition) will form the next Federal Government in Australia; however, thanks to the current tariff war, initiated by the US, the next Australian government will be presented with an unique opportunity to do some serious soul-searching to rediscover Australia – about who we are and what our priorities must be, in both short and long-term – and, possibly, guide Australia towards more self-dependency in the longer run. At least, in addition to providing a firm support to our farmers and soldier, and the development of the regional Australia, we must also provide a conscious impetus to the manufacturing industry, forge new trade and strategic alliances with new partners in Asia and Africa that share our democratic values of fairness and equity.
Australia is historically known to be a western country but, geographically, we are located within Asia. We must strike a right balance in our priorities and stand proud as a responsible, sovereign nation. We must open up our horizon and look for new partners, without much dependency on our current partners. We must envision a self-assured Australia, a world leader in the realms of sciences and technology, sports, and a holistic living.
Like Australia, India, the world’s largest democracy, is also presented with a similar opportunity by the tariff war. It is surrounded by Pakistan, Bangladesh, Nepal, Sri Lanka, Maldives and Myanmar, all of which that are heavily influenced and supported — economically and militarily — by China. Amongst these, Pakistan and now Bangladesh also, due to a phenomenal rise in Islamic extremism in these countries, present an ever-present military threat to India. So, by any sense of imagination, India’s situation is quite precarious. One the one hand, it can’t rely fully on the West, and one the other hand, it can’t afford to be overly aggressive towards China, which the West may want it to do. For that matter, India can’t even afford to be overly dependent on China, Russia or any other country. India’s non-aligned stand has historically served it well. The current government has continued to tread on that path and admirably handled the geo-political issues delicately.
India’s vision to be self-dependent (atam-nirbhar) is both praiseworthy and visionary, and timely. As it has admirably done over the past seven decades since independence. Like Australia, India must also exercise extreme caution in choosing its partners. It must invest wholeheartedly in forging all-weather trade and strategic partnerships with only those that share its spiritual values and the world vision. Before doing that, therefore, India must also revisit its history and rediscover itself. In no case, India must allow to be seen as vulnerable.
India is a strong country, young but founded on solid, old foundations. It has numerous treasures which no other nation can claim to have. With such a young population, India has what it takes to rise further and emerge as the world leader. For doing so, generating employment for its educated, English-speaking youth, which comprise about a billion people, must become its utmost priority, as a recent rise in nationalism in the West may result in closing many doors to aspirant Indian students and potential emigrants from India. India must work on its strengths and, taking a leaf from the US’ book, focus solely on the wellness of the people and the country on the whole.
Lastly, as a word of caution, both Australia and India must not react to the US initiatives or fall into a trap of protectionism. After all, we live in an interdependent global village (Vasudhaiva Kutumbakam), which must be sustained at all costs come what may. Unless required in specific areas, such as defence or agriculture, it may be prudent for both countries to actually reduce the tariffs on other countries, instead of increasing them, or, if possible, eliminate the tariffs altogether. Both countries may benefit if they walk together, as mutually respecting partners, rather than follow others blindly.
Bill K Koul [Perth, Western Australia, 6 April 2025]
©Bill K Koul
After a gap of nearly three months, the author is back from his duty for democracy, in service for his country, Australia. In the last four (4) years, he ran thrice for the parliament. Each time, he has been unsuccessful, but democracy always won. In each campaign, he did what he expected a good candidate to do; he walked through the streets, letterboxed his pamphlets and interacted with people, in person, over the phone or via emails. He helped to raise the awareness about the present and potentially future issues and proposed possible solutions. Most importantly, he provided the people with another option as, in democracy, it takes more than one candidate to run, or else democracy remains democracy no more.