Samir Arora, Founder and Fund Manager of Helios Capital, in an interview with a news channel, stated that the ongoing trade conflict is far from settled, with countermeasures from key global players imminent. "Europe has already signaled its intent to retaliate, Canada is set to respond today, and China will likely follow soon," he noted.
Highlighting the broader implications, Arora pointed out that while the US has urged nations to avoid reciprocal tariffs, such restraint is unrealistic. "It’s not feasible to expect other countries to simply accept these measures without responding," he said.
The Trade War Unfolds
Arora noted that trade wars are prolonged battles, not resolved overnight but shaped by continuous negotiations. "The US is imposing tariffs of 35-40% on certain countries, and naturally, affected nations will respond with countermeasures — sometimes even higher tariffs," he explained.
He cited an example: "If China were to impose a 25% export tax on bulk pharmaceuticals, the impact on global markets would be significant." In the short term, such moves may hurt the U.S., but the long-term goal of the US administration remains clear — reshaping global trade to its advantage.
India’s Stance in the Tariff Battle
Speaking on India's position, Arora described 26% tariff as neither excessive nor minimal. "It falls within a reasonable range, considering previous estimates were around 11%," he said. He acknowledged that Indian exports to the US are relatively small, yet the tariff will have an impact. The US, aiming to reduce its $50 billion trade deficit with India, has structured these tariffs to boost American exports.
Arora suggested that India should take strategic steps to balance the situation. "A smart move would be adjusting the import mix—buying $10 billion more in oil, $5 billion worth of American automobiles, and diversifying procurement strategies," he advised. Such measures, he argued, could help offset economic disruptions.
Global Economic Implications
Discussing the broader market impact, Arora warned that a steep decline in US stocks—potentially around 20%—could trigger secondary effects on emerging markets like India. "We've seen in past crises, such as 2008, that even fundamentally strong economies aren’t immune to global shocks," he said.
Meanwhile, gold prices have been surging amid market uncertainty. While some interpret this as a sign of financial distress, others see it as a hedge against volatility. "Despite the turbulence, strategic investors are staying open to market opportunities, even increasing gold exposure for protection," Arora noted.
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