Luxembourg Deputy PM Xavier Bettel: ‘Tariff war is a lose-lose situation… you just make it more expensive for consumer’

In November 2020, the then Prime Minister of Luxembourg, Xavier Bettel, held the first virtual summit with Prime Minister Narendra Modi during the Covid-19 pandemic. Now, as Deputy PM and Foreign Minister, Bettel, who is on a three-day official visit to India, held talks with External Affairs Minister S Jaishankar on Monday.

After the talks, Jaishankar said “trusted partnerships” between India and Luxembourg have assumed “great relevance in times of global uncertainties and disruptions”. In an exclusive interview, Bettel, who was the PM of Luxembourg between 2013 and 2023, talks about bilateral ties in fintech, AI, tariff wars, immigration and the Russia-Ukraine conflict ahead of Russian President Vladimir Putin’s visit to India for the BRICS summit.

Edited excerpts: Since then, we have done a lot in logistics, also in finance. We have also strengthened ties in education, we have hundreds of Indian students in Luxembourg’s universities. What are the areas of cooperation agreed upon during your conversation with Foreign Minister Jaishankar?

AI, logistics, finance, satellites, space. We have a big Indian community in Luxemburg, we love them. I love Indian food, I love India, and we have successful companies in Luxembourg because of the Indian knowledge. How does the India-EU Free Trade Agreement impact the bilateral economic relationship between Luxembourg and India?

Now it’s the framework. We need to put elements in the framework. So that’s the reason why I think it is important, since now we have this FTA, to see how we can have new opportunities. Indian companies do not know what are the opportunities in Luxembourg, and Luxembourgish companies do not know what are the opportunities in India now.

We need to bring them together. I see some companies in payments and Indian companies which need European licences and see the opportunities to come to Luxembourg. But I'm sure there will be Luxembourgish companies which don't yet know everything they can do in India, and so I need some time to put them in front of the opportunities to show them.

After President Donald Trump assumed office, there has been a tendency to be protectionist; there are tariff wars going on right now. How do you view these tariff wars? I think tariff wars, at the end of the day, are a lose-lose situation.

There is no winner because someone needs to pay the tariff, and so you just make it more expensive for the consumer, and especially you know when you see this escalation — you do 50, we do 50, you do 60, we do 60. At the end of the day, it's in fact the middle class consumer who pays the price.

Rich people don't care if it costs 2, 3, or 10 per cent more… It’s the middle class and less fortunate people who pay the price of commercial wars; we destroy jobs, we destroy economies. So it’s a lose-lose situation. So I don't like commercial wars, and it’s a pity that for some it is for protectionism that they think that tariffs are the new rules.

I would love that in the World Trade Organization we are able again to have dialog and constructive work. You have come here just ahead of the BRICS Summit, which Russian President Vladimir Putin will also attend. This will be his second visit in less than 10 months.

What should the Indian government tell the Russian President about the war in Ukraine? That we won't rewrite history. So there is one aggressor that is Russia, that is a fact. We can't, we won't change history. I had a lot of contacts with President Putin and President (Volodymyr) Zelenskyy at the beginning of the war.

I'm happy that your Prime Minister and your Minister of Foreign Affairs went to Moscow and to Kyiv because mostly people visit one, not both, and we need someone to talk to them. But at the end of the day, when we will have to count how many people died, how many have been destroyed, it's a shame.

And if I would still have contact with President Putin, I would tell him why. He gave me explanations at the beginning… I still have no reason why this war should continue. He will have to justify to orphans in 15 years why their father died, and he will have to explain to mothers in two years why their son died for nothing.

I hope someone will be able to tell him that it is easier to start the war, than to finish the war. That’s leadership. Do you think India's purchase of Russian energy has funded the Russian war machinery? I don't know the figures now.

If it's important, not important. The fact is, we should avoid financing the defence industry and letting money come in. But then you need alternatives. If you have alternatives, I would prefer the alternatives than the Russian ones, to be very honest, as long as this war is on.

But the fact is, with Russia we had history, we had common interests, we shared the continent, we had common goals, and I'm so sad that everything has been destroyed this last year. Especially for me, my grandmother is Russian, and I feel that even today, when I meet Russian people during holidays, they don't know if they should say they are Russians or not, and that makes me sad, because everybody needs to be proud about their roots and history.

A lot has been destroyed, and it will take time to build it again. An anti-immigration mood has emerged in the US and in some parts of Europe as well. We just saw AfD win the elections in a state in Germany. You talked about the Indian community in Luxembourg.

How do you view this immigration debate from where you are? The problem is, we just see the negative parts. We have to know that our continent was built with migration… People migrated from Europe to other countries when there was not enough food, when there were wars.

So we also looked for a better future… You have subjectivity and objectivity. Objectivity is the fact that we need migration, but we need regulated migration. Subjectivity would be that you say we don't control migration, so it is important to have borders that are functioning, mechanisms that are functioning, and also...