S&P warns of the negative global impact of US tariffs, but India may gain as trade shifts.
A recent report by S&P Global Ratings has highlighted the widespread negative macroeconomic impact of the tariffs proposed by the Donald Trump administration. The report warns that these trade policies could slow down global economic growth, increase unemployment, and drive inflation, creating significant uncertainty for businesses and households worldwide.
Titled “Macro Effects of Proposed U.S. Tariffs Are Negative All-Around,” the report outlines how the aggressive tariff measures could lead to a stronger U.S. dollar while causing disruptions in global trade. The impact on the United States itself may be less severe compared to its trading partners, but the uncertainty surrounding U.S. trade policy remains a major concern.
The Trump administration has moved swiftly to implement new tariffs, including a 25% levy on imports from Canada and Mexico, as well as an additional 10% tariff on goods from China. While a last-minute agreement granted a one-month reprieve for North American trading partners, the broader implications of these policies remain uncertain. The administration justified these tariffs under the International Emergency Economic Powers Act (IEEPA), citing threats such as illegal immigration and drug trafficking.
The S&P report cautions that the administration’s approach to trade negotiations could complicate long-term business decisions. “The ongoing deal-making mode of the new administration risks complicating long-term decision-making by both firms and households,” it stated.
Despite these concerns, industry experts suggest that India could benefit from the ongoing U.S.-China trade tensions. Government sources have indicated that while some Indian exports may face scrutiny from the U.S., the overall impact could be positive, leading to increased export opportunities. As global supply chains adjust to new trade barriers, Indian businesses could see greater demand from U.S. importers seeking alternatives to Chinese goods.
In response to U.S. tariffs, China has retaliated by imposing tariffs of 15% on coal and liquefied natural gas (LNG) imports from the U.S., along with a 10% tariff on crude oil. This escalating trade war has further heightened global economic uncertainty, with ripple effects being felt across industries worldwide.
As the situation unfolds, India’s strategic position in global trade may provide opportunities for growth, even as the world grapples with the broader economic challenges posed by these protectionist measures.
(Source: ANI)
