According to Vipul Bhowar of Waterfield Advisors, the implementation of a 10% tariff on most imports, along with a 90-day pause on further increases for many countries (excluding China), presents a valuable opportunity for negotiations.
Although it remains uncertain whether these discussions will lead to a reduction in tariff rates in the coming weeks, efforts to ease trade tensions are currently underway, he believes.
The US increased tariff rate significantly for China to 145%. Hence, "it is likely that China will implement additional measures, which could involve raising tariffs, imposing stricter export controls, or other economic responses," said the Senior Director Listed Investments at Waterfield Advisors.
Do you think the Trump moves through tariffs will hit US economy hard than boost the economy?
Although tariffs will raise substantial revenue, this may lead to decreased economic activity and lower consumer purchasing power. While the revenue has the potential to alleviate federal debt, the broader economic effects are typically regarded as detrimental.
Due to fresh tariff rates, do you believe the Trump will not only hurt the US economy but also derail the global growth?
The anticipated tariffs are projected to adversely affect the US economy by decelerating growth and escalating inflation, while concurrently impeding global economic expansion by reducing trade volumes and promoting economic fragmentation. These repercussions are extensive, impacting businesses, consumers, and economies globally.
Do you see major ripple effects of tariff revisions on India Inc earnings and economic growth (as some experts see half a percent impact on GDP)?
The recent updates to tariffs imposed by the United States, specifically the 26% reciprocal tariff on imports originating from India, are anticipated to have a substantial impact on the revenues of Indian enterprises as well as the overall economic growth of the nation. The economy of India, primarily driven by domestic consumption, demonstrates a certain level of resilience against these external challenges. Nevertheless, the comprehensive effects on revenue and growth will largely depend on the adaptability of businesses and policymakers in response to these modifications.
With this tariff revisions, what could be the action of the US Federal Reserve in the upcoming policy meeting?
The Federal Reserve encounters a predicament involving the balance between fostering economic activity and regulating inflation. Chairman Powell has underscored the necessity of sustaining long-term inflation expectations while remaining poised to address changing economic circumstances. The actions of the Federal Reserve will be contingent upon the developments of the economic landscape subsequent to the revisions of tariffs.
Do you expect likely negotiations to bring down the tariff rates in the coming weeks and support global trade?
There is optimism about the negotiations, but the final outcome depends on the willingness of the involved countries to reach a compromise. The United States has shown a readiness to engage in talks. The implementation of a 10% tariff on most imports, along with a 90-day pause on further increases for many countries (excluding China), presents a valuable opportunity for negotiations. Although it remains uncertain whether these discussions will lead to a reduction in tariff rates in the coming weeks, efforts to ease trade tensions are currently underway.
Do you think the China won't accept these tariff rates easily, and will respond with more measures?
Recent events show that China is actively countering US tariffs with strong measures. China has declared its intent to "fight to the end" for its interests, expressing dissatisfaction with the US tactics. It has warned that any further actions by the US will be viewed as economically irrational. Therefore, it is likely that China will implement additional measures, which could involve raising tariffs, imposing stricter export controls, or other economic responses.
Will the RBI continue with rate cut in the upcoming policy even after 25 bps cut in April meeting or do you see a pause? Also what do you make out of commentary?
As inflation hovers around 3.6%, the RBI is likely to keep prioritizing economic growth while staying alert to inflation trends. The central bank's next move will hinge on the developments in inflation rates and global economic circumstances. It may choose to pause rate cuts to evaluate the effects of recent actions before making further decisions.
The RBI expects GDP growth of 6.5% for FY 2025-26, a slight decrease from earlier estimates due to global issues. To foster growth, further rate cuts may be considered.
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