Ever since Donald Trump became the President of America, other countries have been wondering how to respond to what they regard as his capricious waywardness. That means blatant disregard for established ways of doing things.
Actually it’s probably neither capricious nor wayward. It’s more like what game theory knows as maximin and minimax strategies. Trump uses both simultaneously.
A maximin strategy seeks to maximise the minimum gain you can have in a play or deal. Minimax seeks to minimise the maximum losses you can incur. The two strategies are used in non-zero sum games, that is, when one player’s gain is not exactly equal to the other other player’s loss. That happens in zero-sum games.
Non-zero sum games are not easy to solve, which is probably why Trump is using both strategies simultaneously. He wants to maximise his minimum gain and minimise his maximum loss. Take this policy of reciprocal tariffs. It’s based on the reasonable assumption that reducing imports will increase local jobs. But how can he maximise the incremental increases? There’s simply no way of knowing.
Likewise, in the case of illegal immigrants, he would like to minimise the maximum losses that would happen when a lot of cheap labour is suddenly withdrawn from the workforce. But he cannot know what these losses will be.
This is not his only problem. Even as he adopts these strategies the other countries will do the same. So after an initial phase of disequilibrium, everything will settle down at a new, inefficient level. It’s only a matter of time.
But how long the process will take is unclear. Usually such strategies tend to find a point of mutual comfort sooner rather than later because waiting longer imposes unpredictable and excessive costs. It’s also often usually a matter of who blinks first.
In sum, India needs to stop bowing before Trump and must wait and watch. America stands to lose more than other countries, including India, do.