Free world economic order and free economic system have been busted and brought to a naught. We live in a changing world order that is drastically transformed the global institutions and agencies that operated on commonly agreed upon trade mechanisms between countries. Whatever global multilateral trading system that the global comity of nations evolved for the last 75-years have been totally undermined and set aside by the current American administration led by Donald Trump. We are increasingly witnessing the end of the era of expanding globalization.
Using his executive powers new decrees on tariffs being announced by Donald Trump imposed on countries from 10 percent to 145 per cent forcing countries to fall in line. His orders have totally topsy-turvy the flow of trades across the world jeopardizing the stock and share markets. The current tariff war would raise Adam Smith and David Ricardo from their graves as the citadel of global capitalism and free-market economic system is taking a U-turn to protectionism which is antithetical to capitalist fundamentals.
Global production has changed drastically as products are manufactured from different countries and assembled in one country and from there sent to different countries of sale. So, the supply chain is scattered to different countries based on cheap labour and availability of raw materials along with tax exemptions, import and export duties and host of others. What we are witnessing now is camouflaged the current global war as tariff, but in reality, it is not. It is beautifully packaged and veiled where there is a thin line that divides not just a tariff war, but brand war too. The games that the economically powerful nations play should be de-coded.
Brilliant branding that the Apple computers and its gadgets have ripple effects on consumers that they hardly could resist. Likewise, we are influenced and dictated by a number of brands that covers a wide-ranging want\u2014right from cosmetics to footwears to clothes, interior decors, perfumes, footwear, eateries, home appliances, electronic goods so on and so forth. There are many who swear by Android phones. Likewise, US-made Whirlpool refrigerators are tariffed out in Europe. Then we have a number of brands such as LG, Haier, Bosch as well as our Godrej and Croma that are competing with each other.in every segment and sector.
Hardly local brands survive the competition as the big sharks have gradually swallowed one by one. Rubber and tea can be grown in Kerala, but Malaysia\u2019s rubber is cheaper than the Indian rubber and so should give-up rubber production and concentrate on tea production. Likewise, there are many products or items. Take for example, grapes specially grown in those countries where climatic and soil conditions are good for wine-production. Soils, seeds and irrigation have been so customized that fruits now fall far from their parent tree. Noa country has a natural advantage over others as they did during Adam smith\u2019s time.
We live in a highly competitive world that involved huge capital generating huge profits. Countries that have monopolized in sectors like agri-business, pharmaceuticals, semi-conductors, tele-communications, high-tech appliances, automobiles, and many others. Ukraine and Gaza and other conflicts that we see around is for minerals and scarce resources. America and Russia are now wants to control the precious minerals and earth resources like lithium, cobalt and copper are found in quantities from Chile, Ghana, US to Norway. In fact, China has gone brought major mines of precious cobalt in Congo, lithium.in J & K and Chhattisgarh GOI is moving faster in lithium processing to lower dependence on import batteries.
The wars and conflicts going on around the world are primarily to control rich parts of countries that have rich earth metals and minerals. America\u2019s Levi\u2019s jeans are acknowledged to be one of the world\u2019s biggest clothing companies. Why can\u2019t Indian government slap tariffs the products it imports from the United States. The bulk of Nike shoes are not made in United States except for a small quantity for rapid prototyping and branding. We are living in branded and brands\u2019 world. The brands matter to many in the world. It is your logo, the signature, an identity and presentation You are judged by what you wear, and not what you are.
We are reminded and pushed to refer Adam Smith\u2019s Wealth of Nations in which he says that notion of a country having \u201cabsolute advantage\u201d is not really applicable any more, except in a limited number of cases. Take for instance, India excels in diamond cutting without which the original stone would have none of its luster. United States buys more diamonds from Indian than from Hong Kong, Belgium and UAE combined. Diamond is considered as one of the most previous stones that we find studded in ornaments worn\u2014displaying status and wealth. Though diamonds are purely as vanity purchase with no real value, but at the same time there is no substitute for it. Diamonds add value as long as it derives its value and demand right from wedding rings and host of others like wrest watches to show-off or display of wealth.
Though Harley Davidson motorcycles or owning and driving Elon Musk\u2019s primary brand Tesla on Indian roads hardly equals diamonds, but anybody in India who buys them is audaciously gripped with show-off mind-set and boastfully price insensitive. This is what brands instils a set of values on those who are crazy of brands. All these we see the growing trend towards war of brands underpinning trade and tariffs. Let us not judge what is happening around us in superficial ways, the intent and motif behind the neo-colonial and imperial powers and empire builders need careful analysis and evaluation.
dr. john mohan razu
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