In October, US President Donald Trump made his maiden visit to Asia, attending the ASEAN summit in Malaysia, followed by bilateral visits to Japan and South Korea for the APEC summit. His visit to Asia came at a crucial time, when many were questioning the Trump administration’s commitment to its Asian allies and partners. As the trip ended on a positive note for the allies, it left some lessons that may help partners like India, which want to strike a deal with the US.
Art of the Deal: Market, Money, and Minerals
The initial US response towards Indo-Pacific allies and partners was quite similar, with no distinction between the two. However, after protracted renegotiations and increased pressure from China, US negotiators reached a deal. The agreement, concluded on the terms of the US, was a win-win deal for both sides. The US secured economic and security deals from allies, and in reciprocity, the allies received the US commitment to their alliance. This agreement reached between the US and its allies can be attributed to three primary factors. First, the allies' contribution to the US manufacturing revival; second, enhancing the US’s mineral security; and third, deepening defence cooperation with the US to strengthen the regional security architecture.
On all these parameters, the allies, including Japan, Korea, and Australia, have demonstrated their strategic importance to the US. Whether it is on the subject of economic security, manufacturing revival, or bolstering military preparedness and capability, the allies have shown that they can make significant contributions during Trump's visit to the region. In total, the US secured US$850 billion in investment in its economy, with US$500 billion from Japan and US$350 billion from Korea, out of which US$200 billion is promised, via phased instalments of US$20 per year. Besides, all countries have agreed to greater market access, with fewer tariff and non-tariff barriers.
On the issue of US manufacturing revival, Allies have made significant strategic investments across critical sectors. Japan has pledged to invest in strategic sectors, including semiconductors, pharmaceuticals, and energy infrastructure, with a focus on nuclear energy. Korea has promised to invest $150 billion in the shipbuilding sector. Part of the deal also involves enhancing US mineral security, including establishing a mineral supply chain. China’s hold over US mineral security has only increased the importance of Indo-Pacific allies, particularly Australia, which has substantial reserves, as well as Korea and Japan, which possess significant capacity in the mineral and battery supply chain. Japan is investing in strengthening the US’s mineral processing and refining capabilities. To facilitate this, it has signed a framework agreement with the US. Similarly, Australia signed a $8.5 billion deal on rare earth metals. Besides these allies, there are some exceptions, including Malaysia and Thailand, which have sealed a deal with the US on the sidelines of the ASEAN Summit regarding critical minerals.
Japan and Korea have also signed up for increased energy imports from the US, as well as expressed interest in investing in the Alaska natural gas pipeline. Korea Oil Corporation agreed to purchase 3.3 million metric tonnes per year of Liquefied natural gas from the US.
Simultaneously, allies have reaffirmed their commitment to the US's integrated deterrence. Australia has committed to increasing its share of the defence budget and modernising its military, promising to purchase defence equipment from the US, including Apache helicopters and an Anduril unmanned underwater vehicle worth US$3.8 billion. Japan and Korea have also followed suit.
What is clear is that the existence of an alliance pact among Japan, South Korea, and Australia has helped reduce the friction between the two sides. But reaching an agreement was possible only in part due to the three M’s: market, money, and minerals. This provides some encouragement that the same template, with some adjustments, may also be effective for partners like India.
Learning from Allied Engagements
While US relations with its allies have improved since the initial setback, they still do not enjoy the status they once had. However, irrespective of this fact, it cannot be ignored that they have successfully brokered a deal for themselves, alluring the administration with the three M’s. India can also adopt a similar approach, but it must do so from a different vantage point, considering the limitations of strategic autonomy and its national interests. In this effort, some lessons and observations from the US and its allies' engagement can be of help.
There are three lessons India can take from the US in dealing with its allies and partners. First, do not expect preferential treatment comparable to that of US allies, given the structural realities and the legacy of economic and security ties. Second, US partners can be exempted from scrutiny if they have something substantial to offer, either the market, money, or minerals. However, the third vital lesson is that to secure a deal, a comprehensive agreement that leverages one’s sectoral capabilities and resources is the best way to go.
India can benefit from these observations on how allies and partners have dealt with the US. One of them is to use negotiations to strike a deal that extends beyond the economic domain, including sectors such as defence, technology, and energy. The Trump administration has been more than open to sealing a comprehensive deal beyond the trade agreement. India should adopt this approach to secure a better deal for itself. For instance, Korea was able to use the opportunity to secure US support for developing its nuclear submarine programme, in return for its massive investment in the US economy, a key item on its wishlist. India can leverage this opportunity to secure a comprehensive deal with improved technology agreements and enhanced energy security. In return, India can also attract reciprocal investments in its mining and nuclear energy sectors (already on the cards).
Besides substantial investments and strategic announcements, India lacks a critical arsenal in its armour: the art of subtle pandering. India had its share of such theatrics during Trump’s first administration when Prime Minister Modi hosted the "Howdy Modi" event in the US, even welcoming Trump with much fanfare at a stadium during his first visit to India. However, this time the situation slipped out of hand, given the Pakistan situation. Nonetheless, India can compensate for this with alternative options, such as awards and symbolism, as its allies have. All of US allies have tried to indulge the Trump administration, flattering him. Sanae Takaichi, Japanese Prime Minister, welcoming Trump to Akasaka palace venue parked with American-made Ford F-150 trucks, and the Korean president presenting Trump with the “Grand order of Mugungwha”, the country’s highest medal, were just some examples.
While India may not be able to secure a win-win deal, it can certainly use the opportunity to strike a mutually beneficial one, securing a favourable agreement that includes greater domestic investment. This would not only end the ongoing uncertainty in India–US ties, but would also further boost US investments in India, including those from other countries such as Korea and Japan, which are eagerly awaiting stability in the relations. India should utilise the chance to its potential, optimising the maximum it can get from the US, without compromising its strategic ties with other countries.
(Abhishek Sharma is a Junior Fellow at Observer Research Foundation.)
Views are personal, and do not represent the stand of this publication.
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