Trump's proposed tariffs on China, Mexico, and Canada could benefit India - Report
Dec 10, 2024
New Delhi [India], December 10 : India has a significant opportunity to capitalize on export prospects resulting from expected trade disruptions by upcoming US President Donald Trump's tariff policies, says a report by Shriram Mutual Fund.
The report outlined how Trump's proposed tariffs on top US import partners--China, Mexico, and Canada--could lead to trade diversion, benefiting countries like India.
It said, "India can gain from export opportunities as trade disruptions from US tariffs on China, Mexico, and Canada could lead to trade diversion".
It also mentioned that Trump has threatened to impose steep tariffs as part of his economic policies aimed at protecting American industries and addressing de-dollarization concerns.
The proposed measures include an additional 10 per cent tariff on imports from China and 25 per cent tariffs on Canada and Mexico. Such policies could disrupt trade flows, opening avenues for Indian exporters to capture a share of these markets.
"Trump threatens to impose tariffs over De-Dollarization, Threats to impose tariffs on Top 3 US import Partners, 10 pc additional tariffs on China, 25 pc tariffs on Canada and Mexico" it said.
The report also delved into Trump's broader economic agenda, which could have far-reaching impacts on global markets.
His policy goals include reducing corporate tax rates for US manufacturers from 21 per cent to 15 per cent, imposing tariffs of up to 60 per cent on Chinese imports, and levying 10-20 per cent tariffs on other countries.
These measures are designed to bolster domestic manufacturing but are likely to cause inflationary pressures and higher interest rates.
Additionally, Trump's immigration policies, which propose the mass deportation of illegal immigrants, could disrupt labor supply in the US. On the foreign policy front, Trump plans to cut aid to Ukraine, limit NATO involvement, and strengthen support for Israel and Taiwan.
The report also highlights Trump's efforts to exert greater control over the Federal Reserve, which could lead to short-term market instability. A stronger US dollar, fueled by these policies, is already evident, with the dollar accounting for 49 per cent of global payments as of August 2024--the highest in 12 years.
While Trump's policies could slow global growth and heighten economic uncertainty, the report outlined that India stands to gain as a reliable alternative for exports amid shifting trade patterns.
