Former RBI Governor's Take on US Tariffs

Former RBI governor Raghuram Rajan recently labeled the reciprocal tariffs imposed by the Trump administration on about 60 countries as a "self-goal," suggesting that the move would primarily harm the US economy in the short term.

Impact on India and Global Trade

Rajan pointed out that while the tariffs would raise prices for US consumers and reduce demand for Indian exports, the overall effect on India might be smaller. This is because the US has applied similar tariffs on other countries, limiting the options for US consumers to switch to non-tariffed producers.

A Broader Perspective

He emphasized the interconnectedness of global trade, noting that such protective measures could have widespread repercussions beyond the immediate targets, affecting global economic growth and stability.