Archive · 2 Jun 2025
Experts Weigh In on Tariffs, US Economy, and India’s Role
Imagine the world's economy is like a game of trading.
Some experts are talking about how things are changing in this game.
They're discussing whether tariffs, which are like taxes on goods from other countries, will stay high or go down.
They believe India has a chance to gain from these changes.
The US, which is like the biggest player, has a lot of debt, and this might cause investors to rethink where they keep their money.
This could mean big changes in how money moves around the world, affecting who buys what and where.
It's like rearranging the pieces on a game board.
Experts discuss potential global supply chain shifts and their implications.
India may benefit from companies reevaluating their supply chains.
US tariffs are unlikely to return to pre-existing levels, remaining a tool for revenue and negotiation.
A significant reset in global portfolio holdings is expected, with potential impacts on the US dollar and asset values.
The US faces rising debt levels and fiscal challenges, requiring market attention and possible Senate involvement.
- Who
- Raghuram Rajan (University of Chicago) and Arend Kapteyn (UBS Investment Bank)
- What
- Analysis of global trade, tariffs, and potential economic shifts, particularly focusing on India's prospects.
- When
- Discussion of current economic conditions, with projections for the next 2-3 years.
- Where
- Global markets, with focus on US and India
- Why
- To assess the impact of tariffs, trade realignments, and fiscal policies on the US and global economies, with an emphasis on India's potential.
- Countries relatively immune to tariff uncertainty
- India
- Debt-to-GDP ratio exceeding 100% in the next couple of years
- US
- Potential tariff level on most goods by the US
- 10%
- Consequences of tariffs expected to be visible
- Second half of the year
- Portfolio reset in market flows expected
- Mild to significant