Trade wars result of erosion of trust in systems: IMF MD

TRADE TENSIONS ARE, to a large extent, the result of an erosion of trust in the international system and between countries as global integration—while lifting vast numbers out of poverty—has not benefited everyone equally, with many communities "hollowed out" by jobs moving overseas, said Kristalina Georgieva, managing director of the International Monetary Fund (IMF).

- RAVI DUTTA MISHRA

The impact of trade wars has begun to show up already in Indian sectors, which are facing steep duties on inputs such as steel and aluminum, as well as weak and below-expectation reported by IT earnings due to declining discretionary spending in the US. Several top software firms have even expressed uncertainty about wage hikes in FY26 amid tariff-related disruptions.

Moreover, Indian goods exports in FY25 barely grew as shipments of labor-intensive sectors such as gems and jewelry and marine exports remained under stress registering a degrowth. Trade wars have also triggered concerns about dumping of Chinese goods with US tariffs on China reaching as high as 245%.