Trump tariffs points (2/n)

Sorry for the delay. Now let me put points one by one.

Impact on India. As I write this, there are a lot of back door negotiations going on between the US & concerned nations including china. Also the US knows that they can't manufacture each & every thing on their own. So tarriff will definitely going to come down. But they will not go back to zero. & China will face biggest burnt of it. China has 8% of global share. But 30% of global MFG capacity. Which means China will not b able to absorb all the goods they produce. So these giant factories have to export these additional goods. So in case US will raise the tariff wall, all these Chinese goods will be diverted to India, Japan, Australia & EU as they are next big markets after US. So India has to play smart. India too has to impose tariffs on China to save domestic auto, steel, toy, electronics industry. China won't let that happen easily. So lots of negotiations are going to happen. e.g. china is putting restrictions on foxconn machinary to be imported to India to delay iphone MFG in India.

At the same time, I am estimating that India will move swiftly to complete bilateral trade agreement with UK, US & EU on priority basis. This will provide less tariff entry to these countries. But in return they too will demand easy entry in India. So its a very tricky job. So we will see a lot of busy time for Mr S Jaishankar & Mr Piyush Goyal in coming days.

Will post seperate abt impact on market & IT in next post.