TRADE WARS CREATE ONLY CASUALTIES – WHY IS TRUMP DOUBLING DOWN?

Trade wars have no winners, only collateral damage. And yet here we stand, watching the US under Donald Trump revive an age-old weapon of economic aggression: tariffs on Indian goods and services. What is being touted by Trump as his daring step towards #MAGA is apparently going to be stripped naked as a shortsighted gambit that will soon get disregarded as the hyperlinked reality of today's global economy.

- An article by Sachin Kshirsagar, Founder, Piranha Design Lab

For India this move demands more than just an outrage. It calls for a strategic renaissance in how we brand, price and position our products and ourselves in the global market. Exactly why, we should hang on smart at Trump's circus.

RISE IN COST

Trump's recent tariff proposals on Indian goods targeting mostly textiles, pharmaceuticals and IT services are projected to increase export costs across critical sectors. According to the WTO, every increase in tariffs can lead to a drop in global trade volumes. Multiply that effect across the quantum of Indian exports to the US, and the cost is sure to spiral into billions.

Experts at the Harvard University call tariffs in today’s economy “a relic of mercantilism” (saudebaazi), reinstating how majority of US companies rely (entirely) on global value chains. A recent report reinforced this, warning that protectionist measures could shave off significant US GDP over the coming five years. Ironically, these moves may hurt Uncle Sam's own competitiveness as much as they aim to hurt us.