Markets are bracing for spillover effects across sectors and regions.
U.S. President Donald Trump’s latest tariff salvo against India, triggered by its continued oil trade with Russia, has sparked a diplomatic storm and raised the specter of deeper global trade ruptures.
The new executive order imposes an additional 25% duty on Indian imports, lifting the total to 50%, and comes alongside renewed confrontational rhetoric toward China, which has also faced pressure over energy dealings with Moscow.
India has sharply pushed back, calling the tariffs “unfair, unjustified, and unreasonable” and accusing Washington of double standards for targeting New Delhi while continuing its own imports of Russian commodities like uranium and palladium.
Economic Consequences
SEBI-registered research analyst Pradeep Carpenter offered a broader view of the implications of Trump’s renewed protectionist playbook.
He blamed the trade war’s origins on 2018 when Trump first levied tariffs of 25% on steel and 10% on aluminum. The duties soon extended to all goods from China, the European Union, Canada, Mexico, and others, leading to an all-out U.S.-China trade war.
Carpenter said the policy was supposed to restore U.S. manufacturing, reduce trade deficits, and flex national strength but it instead led to disruptions in global supply chains, higher prices for U.S. consumers and a loss of confidence in American leadership.
He added that the average American family ultimately paid hundreds of dollars more each year as a result, with the poorest Americans suffering the most.
On jobs, Carpenter observed that the promised manufacturing resurgence never materialized. Instead, rising input costs weighed on industrial performance.
As China and other countries retaliated with their own trade barriers, the U.S. government had to provide billions of dollars in farm subsidies to soften the blow.
Carpenter said the effects rippled far beyond the U.S., reshaping global sourcing patterns and pushing companies to relocate operations from China to countries like Vietnam, India, and Mexico, albeit with higher setup costs.
He also highlighted a slowdown in world trade growth and a trend of nations deepening regional ties and trade blocs such as RCEP, while reducing reliance on the U.S.
Global Strain
With the return of Trump’s tariff agenda in 2025 and the latest escalation against India, Carpenter said markets now fear the spread of duties to more regions, including the EU, Mexico, and ASEAN.
He warned of a potential new cold trade war with China, along with disruptions in sectors like technology, pharmaceuticals, energy, and auto parts.
The domestic consequences in the U.S. could also be severe. Carpenter pointed out that higher import costs may reignite inflation just as the Federal Reserve tries to stabilize the economy. This could create a policy bind where the Fed faces pressure to tighten even amid slowing growth.
Businesses worldwide may hold back investment amid uncertainty, while emerging markets may face new volatility.
Carpenter concluded that while tariffs may project political strength, they ultimately lead to the fragmentation of the global trade system. “The U.S. consumer ends up paying,” he said, noting that while supply chains may shift, they do not necessarily return to the U.S.
Over time, he warned, American soft power could decline, and nations may increasingly build trade ecosystems that work without the U.S.
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