-Akhlaq Ahmed Usmani*
President Trump has taken the reins of power and change is in the air. President Trump has sounded the trumpet of change with withdrawal from Trans Pacific Partnership. I am specifically looking forward to changes in oil and Gas policies starting with Border adjustment tax. This tax reform is focused on promoting domestic manufacturing and will make imports unattractive as the Companies would not have to calculate revenue from exports in their tax base, but would be unable to deduct the cost of their imports. I am not sure about the impact on American manufacturing, as the manufacturing has moved towards automation and even China is shifting towards it. President Trump’s protective policies may result in moving business to USA but I am not hopeful about return on Jobs.
However, the proposed tax reforms of President Trump will have marked impact on Oil and Gas Industry as the America still imports lots of crude oil. Experts including PWC has predicted the huge impact on the energy industry. This border adjustment proposal benefit exporters of refined products chemicals etc whereas will adversely impact the importers of crude oil for refining as such importers shall not be able to deduct import expenditures. This move combined with Protection of Trumped USA is expected to cause strengthening of US dollar, which in turn will lead to making imports cost effective and exports unattractive. Net result will be that the US government will enjoy all the negativity of the proposed tax reform without getting any benefit.
Funny thing about the proposed reform is that it will fail to achieve the desired result but will benefit the global economic and political environment. US pursuit of oil security has lead to promotion of terror across the globe as oil Industry has taken advantage of CIA and other US agencies for its own vested interest in collusion with Arms Lobby. If Trumped USA shifts its focus to internal issues from its foreign policy, then it will give much needed respite to global populace suffering from terrorism as a result of promotion of terror as a tool of foreign policy by the US Government.
American interests in oil and gas domain are expected to be synchronised with Russian interests as the new Secretary of State Rex Tillerson (Former CEO of Exxon Mobil) has good personal rapport with Vladimir Putin. This personal chemistry of the new Secretary of State is expected to bring Russia and USA together, which will have positive impact on Syria, where radical jihadists are waging a war against Assad Government, which is legal government of Syria. New Secretary of State is a deal maker who carries no emotional baggage. He has already called for lifting of sanctions imposed against Russia in 2014 for its military assault against Ukraine. He is expected to work closely with Russia in pursuing common interests in Middle East starting with withdrawal of support to so called moderate jihadists. These so called moderate jihadis are actually more barbaric than Islamic State (ISIS) or Daesh. Ascendency of President Trump to power has caused panic among the terrorists and has finally forced them to come to table for negotiation.
Now, it will be interesting to watch the reaction of Israel which has been eying Syrian Golan heights and expects to get possession in the ongoing turmoil of planned Syrian split. Recep Tayyip Erdogan, President of Turkey has his plans for revival of Caliphate and oil security, which included their vested interests in promotion of terrorism in Syria. It is well known fact that Turkey has openly supported ISIS and other terrorist (OOPS Rebel) organization in capturing Syrian territory with US support. US and Russian joint action plan will hurt the vested interests of Turkey and Israel and at the cost of repetition, it will be interesting to wait and see how the cookie crumbles.
*Editor of DiplomacyToday.in