Leverage, time & the long game

This is the game every nation is now learning to play. Some are finding new allies or seeing value among nations where they'd seen marginal interest. The starkest example is India and Europe

- SHEKHAR GUPTA

In geopolitics today, the name of the game is leverage and time.

It isn’t one versus the other. The two aren’t inversely but directly proportional. The more leverage you have, the more time you have at your command. Any nation of some consequence, which is actually any sovereign nation, even the smallest and apparently marginal, is playing the same game. Where India stands in this equation, we'll come to as this argument unfolds.

Think Lesotho. A kingdom of just 2.3 million people, a landlocked highland, surrounded by South Africa. It has deep and widespread poverty, among the highest HIV/AIDS prevalence, and a per capita income about half of Pakistan’s. It has a unique industrial strength, however. It is called the jeans hub of the world. The garment industry is its largest employer, with about 50,000 people. The bulk of the exports are to the United States. This is 10 per cent of Lesotho’s gross domestic product (GDP). It was built on the strength of duty-free access to the US under the African Growth and Opportunity Act (AGOA).

Then came Donald Trump in 2025, and forget AGOA, Lesotho was slugged in the gut with a 50 percent “Liberation Day” tariff, later reduced to 15. Poor Lesotho can’t compete with the larger Asian manufacturers, Bangladesh, Vietnam and India included. It officially declared a “state of disaster”.

Let’s take Lesotho as our case study for a country with no leverage or time. Its economy cannot even afford to wait Mr Trump out for three years minus three months. Then we come to the nation with the most leverage and time. You guessed it right, China. In trade, it has both a seller’s (critical minerals, magnets) and buyer's (soybean, corn) leverage.