Time for India to prepare: Uday Kotak warns of global fallout from Trump’s tariffs on China, Canada and Mexico

Uday Kotak urges emerging economies to prepare for global market turbulence as US President Donald Trump imposes new tariffs on key trade partners

As global markets brace for the fallout from US President Donald Trump’s latest tariff measures, Uday Kotak, founder of Kotak Mahindra Bank, has issued a stark warning about the far-reaching effects on international trade. Kotak highlighted the potential disruption to global supply chains, as the US imposes new tariffs on Canada, Mexico, and China.

“Trump, tariffs, turbulence. US imposes fresh import duties on Canada, Mexico, and China. It will have a major impact on global supply chains and markets,” Kotak wrote, highlighting the urgency for emerging economies like India to prepare for possible shocks. “Time for emerging markets, including India, to prepare for and be resilient to outflow shocks from global investors,” he added.

Trump, tariffs, turbulence. US imposes fresh import duties on Canada, Mexico and China. It will have a major impact on global supply chains and markets. Time for emerging markets including India, to prepare for and be resilient to, outflow shocks from global investors.
Uday Kotak (@udaykotak) February 2, 2025

Kotak's remarks come after US President Donald Trump issued executive orders imposing 25% tariffs on most imports from Mexico and Canada, and 10% duties on goods from China, starting Tuesday. The move, which Trump frames as part of a broader strategy to tackle what he deems a "national emergency" involving illegal immigration and the fentanyl crisis, has prompted swift responses from the affected nations.

In response, Mexico and Canada, two of America's top trade partners, quickly unveiled retaliatory tariffs. Canadian Prime Minister Justin Trudeau announced 25% tariffs on $155 billion worth of US goods, warning of potential price hikes on groceries, gasoline, and auto plant closures. He also highlighted possible disruptions to essential commodities like nickel, uranium, steel, and aluminum. Trudeau further urged Canadians to reconsider travel to the US and to avoid purchasing American products.

Meanwhile, China has vowed to contest the tariffs at the World Trade Organization and hinted at potential additional countermeasures. The escalating trade dispute has sparked concerns that it could harm global economic growth, drive up inflation, and further disrupt already fragile supply chains across the world.

Earlier in his presidency, Trump signaled a hardline approach on tariffs, targeting not just China but also naming India and Brazil for their high tariff rates. “We’re going to impose tariffs on foreign countries and entities that harm us,” Trump declared at a Florida event, accusing countries like India of placing unfair barriers on American goods.