IGI Logo

"Uncertainty unleashed by Trump is aggravating in global trade. The 25% tariff on Canada and Mexico and the 20% tariff on China (with the additional 10% imposed now) kicking in the threats are turning into action. The retaliation to these Trump tariffs is yet to be known. Certainly there will be responses.

If Trump tariff policy continues like this and soon starts impacting other countries it will be bad for global trade and the global economy. India will not be spared. So what will be the eventual outcome?
There is one factor that will tame Trump and that is the market reaction. Even mighty Trump cannot influence markets. Tariffs will soon raise inflation in the US and the Fed can turn hawkish. The US stock market, which is now priced to perfection, can suffer a severe correction, even a crash. This outcome, which Trump abhors, can tame him and bring about some sanity and balance in his policies. We don’t know when this will happen.

In the near-term, there are no chances of a rebound in the Indian market even though valuations are fair. Investors should remain cautious and wait to see how the scenario unfolds."

 

Above views are of the author and not of the website kindly read disclaimer