Against massive liberal resistance 24/7 through America's legacy news media, Donald Trump was reelected on Wednesday morning (Washington local time) as America's 47th president.
Vice President Kamala Harris ran an energetic campaign supported by numerous Hollywood stars. Taylor Swift, Beyoncé, Jennifer Lopez, Eminem, Billie Eilish, Cardi B, Harrison Ford, Richard Gere, and Oprah Winfrey all committed time and effort to get her elected.
On the political front, former Presidents Barack Obama and Bill Clinton and their wives, Michelle Obama and Hillary Clinton, actively campaigned for her. Hundreds of Republicans, including former Vice President Dick Cheney and her daughter Liz Cheney, along with more than 150 members of America's national security complex, supported her.
In the end, it all failed.
Trump trounced her in the Electoral College 295 - 226, with two states (Arizona, and Nevada) still counting their votes. [The winning candidate needs 270 Electoral College votes]. Trump was leading in both, so he could win 20 additional votes to reach 312, an extraordinary achievement in a closely divided nation.
Trump was a known quantity
As one of the wealthiest politicians ever to grace the American landscape, Trump owns golf resorts, luxury hotels, and apartments worldwide. He made his name as a star of a reality show on NBC/Universal. Trump's controlling stake in Truth Social, the social media company he launched shortly after he was banned from Facebook and X (then Twitter) in 2021, is worth more than $7 billion. When he won in 2016, he had never run for any political office prior, directly securing the presidency. In the White House, he only accepted a salary of $1 a year.
Under Trump's first term, America's borders were safe, with the lowest levels of illegal immigrants in recent memory. Inflation was low, and there were no new wars during his entire term. In December 2019, America became energy independent for the first time, producing all the oil and natural gas it needs without relying on imports. Trump believes in a strong American military and created the United States Space Force to complement the country's Air Force.
The MAGA Magic
Trump promised voters that he would recreate that magic by Making America Great Again. As a former businessman and the author of The Art of the Deal, he intends to run America like a business—making deals with foreign governments and companies on terms that are always favorable to the United States through carrots (incentives) and sticks (tariffs) - based on common sense.
Speaking at the Economic Club of Chicago last month, he revealed how he would run his second term. If a foreign auto manufacturer, like Toyota, invests in a new factory in the United States, he would only tax it at 15%. [America's current corporate tax rate is 21%]. If a foreign country floods America with cheap goods to gain market share, he would hit it with a tariff.
What can India look forward to during a second Trump administration?
The Trump-Modi friendship can help
As a businessman, Trump values relationships, and the Trump-Modi relationship between an Indian leader and an American president has been remarkable. Trump attended the Howdy Modi rally in Houston in September 2019, the first time an American president had participated in a community rally. Five months later, just before Covid-19 gripped the world, Trump visited India for the first time and attended the "Namaste Trump" rally at the Narendra Modi cricket stadium. Both rallies were exceptionally well attended.
While Modi may be able to extract some concessions from Trump, such as the transfer of technology for peaceful nuclear energy, India should proceed with caution, remembering that Trump would not hesitate to punish India if Trump believed it would be in America's best interests.
Trump could impose tariffs on Indian exports
Howard Lutnick, the head of Trump's economic transition team, outlined a simple rule on CNBC that explains Trump's philosophy about tariffs: "We should put tariffs on stuff we make and not put tariffs on stuff we don't make."
Which Indian exports could be impacted? In 2022-2023, India's exports to the U.S. were estimated to be around $80 billion. The pharma sector, which exports about $12 billion, would be unlikely to be tariffed because healthcare costs are already high in America. Trump wouldn't want a backlash if Indian manufacturers pass on the tariffs as higher costs to American consumers. We should remember that in Trump's vision, America always comes first.
The Gems and Jewelry sector, which exports about $10 billion each year, primarily diamonds, is unlikely to be tariffed because America doesn't have a native Gems and Jewelry sector.
If Trump becomes concerned that American companies are outsourcing too much technology and back-end work to India, resulting in the loss of American jobs, he could impose a tariff on Indian technology vendors. Such a move would squeeze their Indian profits unless they can pass on the tariffs to their American customers as additional costs, something that is difficult to do in a cutthroat marketplace. Lower operating margins in India could mean a more demanding workplace, even more than it currently is.
Textiles and Apparel ($16-18 billion in exports), Automobiles and Components ($5-7 billion in exports), and Agricultural products ($5 billion) such as spices and seafood - could all begin to attract Trump tariffs unless PM Modi negotiates with Trump.
The Russia-Ukraine War Will End
Trump has repeatedly questioned the wisdom of sending billions to Ukraine to fight Russia and says that he will end the war in 24 hours. America has already spent $200 billion on the war effort, money that Trump believes could have been better used building America's failing infrastructure.
Prime Minister Modi has navigated a delicate balance since Russia attacked Ukraine. Modi has never said Russia was at fault but has consistently said that the focus should be on ceasing fire and beginning peace talks. The Biden-Harris administration detested India's Russia position and even threatened secondary economic sanctions against India, a policy that would have continued had Harris won.
If the war ends, Trump will unwind America's sanctions regime, freeing Russian oil to flow more easily, increasing global oil output, and lowering pump prices. The Indian Finance Ministry, addicted to GST revenue at the pump, is unlikely to reduce petrol, diesel, and gas prices even if world oil prices were to fall, but this is an internal matter unrelated to Trump.
Supply Chain Diversification Efforts will help India
Trump sees China as a significant threat and will be willing to invest in India to diversify the global supply chain away from China. Expect the Trump administration to get American companies to expand bilateral ties and increase India's position as a vibrant manufacturing economy.
H-1Bs, Green Cards, and Family Visas
Trump has repeatedly said that he would deport illegal migrants, but he favors legal immigration. Trump is a fan of Elon Musk, who was born in South Africa and became a naturalized U.S. citizen. Musk, the founder of PayPal, Tesla, SpaceX, and Spacelink, and the owner of X has been one of Trump's most avid supporters. Musk has repeatedly said that merit should matter while awarding Green Cards. Trump could string together a deal with Congress in which both the problem of illegal and legal immigration is addressed.
Trump is a far better India partner than Harris
Kamala Harris, born to a South Indian Tamil Brahmin mother, self-identified as Black and did nothing meaningful to advance India-US ties.
Congratulations, Mr. President-Elect!
