Why India wins in an 'America First' world: Pinetree's Ritesh Jain on Trump's tariff gambit and the global reset

Jain, a long-time macro watcher, believes this marks a turning point—not just for US policy but for global capital flows.

As markets reel under the impact of US President Trump’s aggressive tariff readjustments, Moneycontrol spoke with Ritesh Jain, founder of Pinetree Macro, a US-based hedge fund, to decode the economic ripple effects.

Jain, a long-time macro watcher, believes this marks a turning point—not just for US policy but for global capital flows. He told Moneycontrol that Trump’s trade war may be less about diplomacy and more about domestic survival, how the MAG 7 tech stocks are bound to lose, and why India could emerge as a winner in the reshuffling of global markets.

Edited excerpts:

What’s your take on Trump’s tariff readjustment?

The US believes it has been shortchanged over the past 20–40 years, and Trump is acting on that belief. There are no alliances—only America First. He’s inspired by President McKinley, who used tariffs to drive manufacturing back to the US. Trump knows that without domestic production, foreign buyers may stop purchasing US debt.

Like a new CEO with a short grace period, he’s taking drastic steps early. After six months, opposition will grow; after two years, the midterms make major policy shifts harder. The pain must come now, with the hope that tax cuts and private-sector job growth will follow.

What will be the impact from an economic perspective?
The latest ADP employment data shows manufacturing jobs are in positive territory for the first time in 12–18 months. Fewer immigrants mean rising wages. He’s pushing companies to manufacture closer to American consumers. It’s a high-stakes game—he could fail, but there’s a good chance he’ll succeed. However, it will take time.

Do you see a US recession coming?
Before April 2, we were quite certain a slowdown was coming. US Treasuries broke below 4% today, which strongly suggests a recession is around the corner.

What does this mean for countries relying on US trade?
Nations dependent on the US military umbrella—Japan, South Korea, Taiwan—may push their firms to set up factories in America. Others will wait and watch.

US markets have reacted violently—why?
Markets weren’t taking Trump seriously. Now they know this is dead serious. And Trump’s priority is Main Street, not Wall Street. This is a US problem—not necessarily a global one. None of the assets outside the US have fallen as sharply.

Do you see the Nasdaq and the MAG 7 at greater risk?
Absolutely. Trump is clear: the MAG 7 stocks (big tech giants) are not America—Main Street is. US manufacturing is just 10% of GDP, while 70–80% of the economy is service-based, dominated by these seven companies. The MAG 7 accounts for 37% of the S&P 500. Trump has thrown them under the bus.

What happens to the dollar?
The US is pushing for a weaker dollar. Think of it as a new Plaza Accord—meant to devalue the dollar and boost domestic manufacturing.

Will this be a turning point for the dollar?
Yes. The US wants capital in factories, not in financial markets. That means it’s shifting from being the world’s banker to prioritizing domestic growth. The reserve currency mantle is weakening—gold is increasingly acting as a safe haven. Moreover, future trade may rely more on bilateral agreements, as seen in India’s swap lines with SAARC nations.

How do you see global capital flows realigning?
Trump’s first term saw money rushing into US equities. Today, with $11 trillion in European money tied up in US assets, some of that will look for new destinations. Over the next 2–3 years, flows will rebalance toward economies with growth potential—India will be a key beneficiary.

What’s your prognosis for the rupee and Indian interest rates?
If oil prices remain stable, the rupee should appreciate. The US wants a weaker dollar, but oil remains a key risk for India. If crude behaves, the RBI will have room to cut rates sooner rather than later.

Do you think the US market has peaked?
Absolutely. The US accounts for 25% of global GDP but 65% of global market cap—an unsustainable imbalance. Japan peaked at 18% of global GDP and 48% of global market cap in 1989 before its long decline. The US is now moving toward a less financialized economy. That doesn’t bode well for stock markets.

So, short-term pain for global equities? Where do you see India?
US markets are seeing a much steeper fall than others. All markets will realign, but the US will likely be the biggest loser. India, meanwhile, is bouncing back after months of foreign outflows. This could mark the start of a divergence between American equities and other global assets. Money will now chase non-US markets.

Do you see Emerging Market funds facing redemptions?
Maybe not. The usual reaction—investors flocking to the dollar during uncertainty—isn’t playing out this time. Investors may just stay put, as recent market movements suggest.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.​​​