Donald Trump’s ‘bright ideas’—in the form of a flurry of sweeping executive orders—are worrying people in company boardrooms as well as family drawing rooms across the world. From trade tariffs and remittance taxes to a crackdown on visas, his unprecedented policy proposals may have far-reaching social, political and economic implications for countries like India. Many of the proposals stretch the boundaries of established American jurisprudence, leaving a faint hope that not all of them may eventually materialise. For example, a US federal trade court on Wednesday blocked Trump’s tariff moves, ruling that an emergency law the White House invoked to usurp the Congress’s power to levy tariffs “exceeds any authority granted to the president” in the matter. The Trump administration has appealed the ruling; but if the court’s order prevails, it will be a huge relief for the 180-odd nations that trade with the US.
We may want to hold the jubilation as Trump could land another debilitating punch on the issue, just as we are witnessing in the case of student visas, whose processing the US paused on Tuesday. The move comes close on the heels of Trump’s failed attempt to revoke Harvard University’s certification to enrol international students, which too was blocked by a federal court. The state department is now working on a new system to scan all student applicants’ social media presence for posts found offensive by the administration. Indians account for the largest number of foreign students in the US—at about 30 percent, they surpass even Chinese students. With the next intake just around the corner, prospective students are deeply worried. American universities will also be hit, as foreign students are an important financial source for many of them. In any case, Indians are increasingly turning to destinations like Germany, Ireland and Russia, where their enrolments have more than doubled in the recent past.
India is also the world’s biggest recipient of remittances. Trump’s 3.5 percent tax on money sent abroad by those who are not US citizens would affect H-1B visa holders and even permanent residents. Some policy watchers argue that India should impose similar levies on US companies and investors in response. But regardless of whether Trump’s policies flow from a coherent approach, they could have long-term economic and diplomatic consequences not just for India, but also for the US.