Trump Chases Prizes, India Courts Petty Rivalries
Trump seeks a Nobel for a hollow peace deal, while India’s cricket win turns petty—both confuse theatrics with strategy.
The Gist
US Government Shutdown Over Medicaid Cuts
- Democrats are refusing to yield to MAGA blackmail, demanding restoration of Medicaid cuts to support a spending measure.
- The administration threatens mass layoffs of Federal employees.
- Trump issues an ultimatum to the Palestinians to accept the deal.
- He also demands recognition from the Nobel committee for the peace proposal.
- India requests solar and wind producers to reduce output due to lower-than-expected demand.
The US government has shut down, Democrats refusing to give in to MAGA blackmail. Democrats are sticking to the demand that the administration restore the cuts to Medicaid that were voted into the One Big Beautiful Budget Bill Act, for them to support a spending measure that would keep the government open. The administration has threatened to sack Federal employees en masse.
The dollar has weakened as a result. The market is concerned that the shutdown would prevent the release of the jobs data that could help the Fed cut rates sooner rather than later. The shutdown would matter for the rest of the world only if it continues for long. India’s central bank has held policy rates unchanged.
End In Sight For Gaza
An end to the Gaza war seems in sight. President Trump of the US and prime minister Netanyahu of Israel have offered Palestinians a ceasefire deal that offers to end the fighting in return for all the hostages and complete disarming of Hamas, with no guarantees of a Palestinian state or non-aggression on Israel’s part.
Trump has given Palestinians an ultimatum to accept the deal or face the full wrath of Israel, with complete US backing. Trump has also issued an ultimatum to the Nobel committee that decides on the Peace prize, explaining that if this deal, which, in Trump’s words, puts an end to thousands of years of fighting between the two sides, does not get the prize, that would amount to an insult to the people of the United States.
The reference to thousands of years of conflict between Jews and Palestinians is, perhaps, not totally surprising in a man of Trump’s familiarity with history. Goliath, whom the future King David killed with a stone from a sling, was a Philistine. It is easy to confuse Philistine with Palestinian. The Philistines, it appears, probably came from the Aegean and were referred to as the sea people. The nomenclature of Palestine did not exist in Biblical times.
Pharma Exporters On Tenterhooks
Trump has been active on the pharma front. First, he ordered 100% tariffs on imports of branded and patented pharmaceuticals. While Indian exports are mostly of generics, some generics are branded generics. Whether these would attract the duty of 100% depends on how customs officials interpret the order.
Even as Indian pharma exporters fret on tenterhooks, Pfizer, the American pharma giant, gave Trump a propaganda win, by agreeing to a deal that exempts from tariffs its imports into the US from its many overseas production units. In return, Pfizer has agreed to one, join a Federal government-subsidized retail drug sales platform called TrumpRx, to sell drugs at a steep discount, two, to sell drugs to the government’s Medicaid programme at a price that matches the lowest price at which the same drugs are sold in other developed countries, and, three, to invest $70 billion in drug discovery and innovation.
The Republicans now claim that the President is busy negotiating drug prices down, even as Democrats play politics. It is a different matter that, in 2022, the Biden administration had passed the Inflation Reduction Act, which authorized the government, for the first time, to negotiate drug prices with pharma companies. The resulting lower prices are slated to kick in only in 2026, however. Following Pfizer’s deal, other companies could agree to similar deals.
The provision obliging pharma giants to charge US buyers what they charge European ones is likely to jack up prices in Europe, not just reduce prices in the US. As the prices of patented drugs go up in the US and Europe, Indian makers of generics that are close substitutes to some, at least, of the drugs under patent, should have a good time.
China has stopped imports of American soyabean, leading to the accumulation of soyabean stocks with US farmers and traders. Will they blame their president’s wayward trade policy for their troubles, or the treacherous orientals? We hold our breath, waiting to find out.
Excess Renewables
India has witnessed the rare phenomenon of asking solar and wind power producers to back down their generation, thanks to lower-than-expected demand, reports Nikkei. Normally, thermal power producers are the ones asked to back down, while accommodating the power from renewable sources into the grid.
What this unusual development indicates is the need to increase gas-based power generation, which can be scaled up or down relatively easily, in the overall power mix, to permit renewable sources full play, without having to back down.
After a season of natural disasters killing people in the Himalayas, manmade ones seem inevitable. One took place in Ladakh, where people are agitating for statehood, and the police fired on protesters, killing at least four and injuring about 50.
Another struck a village in Tamil Nadu. A popular Tamil film star, Vijay, is testing the waters for a political career and holding roadshows. A rush of fans to see their hero led to a stampede that left 41 dead, at least a hundred injured, and plenty of blame to be thrown around.
India’s Behaviour: A Mistake?
India won the Asia Cup for T20 cricket, defeating Pakistan in a thrilling final. The Indian team captain refused to shake hands with his Pakistani counterpart and refused to accept the trophy from a Pakistani minister. This divided opinion sharply in the country, many focusing on the game of cricket and the spirit and player conduct appropriate to the tradition of the game, while others chose to see the match as an extension of hostility between the two states, and endorsed the rejection of civility as the only patriotic option.
Suppose India had lost the match. Would that have meant that India as a nation had lost to Pakistan morally, in combat or geopolitical competition? If Pakistan as a nation is beneath India’s civilised engagement, why play that country’s team in the first place?
But this is not the only reason why boorish behaviour towards Pakistani players and officials is a mistake. Pakistan as a neighbour is a geographical compulsion that cannot be wished away. India’s aim should be to make this coexistence minimally harmful, if not maximally beneficial. In this, it is useful to make a distinction between the people of Pakistan and the Pakistani state.
It should be possible for India to see the people as an ally in blunting the edge of the Pakistani state’s animosity towards India. There is a shared universe of culture, history and aspirations transcending the border dividing the two countries. Strengthening those bonds is what will lead to the ordinary people of Pakistan crying foul when nefarious agencies of their government unleash cowardly attacks on India. Graceless conduct at the Asia Cup only serves to breed animosity and destroy goodwill.
That only serves to give the Pakistani state’s hostility to India wider popular appeal.
