Changing Global Economic Order and India's response to protectionism

In recent months, global financial markets and trade policies have been marked by mounting uncertainty.

- Dr. Rajiv Khosla

Both the International Monetary Fund (IMF) and the Organisation for Economic Co-operation and Development (OECD) have projected a global economic slowdown. According to the IMF's World Economic Outlook (April 2025), global growth is expected to be 2.8% in 2025 and 3.0% in 2026. Similarly, the OECD's Interim Economic Outlook (March 2025) anticipates global GDP growth to ease to 3.1% in 2025 and 3.0% in 2026, citing rising trade barriers and heightened policy uncertainty as key factors dampening investment and household spending. Core inflation is also projected to remain above central bank targets through 2026.

This economic instability is reflected in financial markets, with record-high gold prices, increased volatility, a weakening U.S. dollar, and falling crude oil prices. These developments underscore a volatile global economic landscape, largely influenced by U.S. President Donald Trump's unpredictable immigration and tariff policies. While he has recently moderated his stance, it's important to note that U.S. protectionism is not a new phenomenon. To understand its evolution, a closer look at the historical context of U.S. immigration and tariff policies is warranted.

Historical Context: Immigration and Tariffs in the U.S.

Following American independence in 1776, the Naturalization Act of 1790—signed by President George Washington—granted citizenship exclusively to “free white persons” of good character, deliberately excluding Africans and Asians. At the same time, the American public was urged to remain neutral in the conflict between Britain and France. Over time, however, waves of immigrants from Ireland, Germany, Poland, Italy, Hungary, and China arrived in the U.S., seeking opportunity.