US Trade Uncertainty Impacts Asia's Growth

Ongoing uncertainty surrounding US trade policy, particularly the recent tariff actions by the Trump administration, is poised to undercut business confidence and consumer sentiment across Asia, including India, potentially dampening regional growth significantly, according to Moody’s Ratings.

China Bears the Brunt of Tariffs

While President Donald Trump has delayed implementing reciprocal tariffs on most countries for three months, China faces a steep 125% tariff, with an additional 10% duty on exports to the US, intensifying pressure on global trade dynamics.

India's Resilience Amidst Global Headwinds

Economies like India, with substantial domestic markets, might see benefits as companies aim to leverage local demand. However, Moody’s suggests that any significant redirection of investment flows would require several years to fully materialize.

De-globalization and the Future of Trade

The temporary halt in tariffs does not signify a reversal of de-globalization trends but rather introduces more unpredictability into trade policies, especially as the US advocates for the reshoring of manufacturing supply chains.

India-US Trade Talks: A Window of Opportunity

The 90-day tariff pause offers a crucial period for advancing negotiations on the proposed bilateral trade agreement between India and the US, with both nations aiming to elevate their trade volume to USD 500 billion by 2030.