'Worse Than The Worst-Case Scenario': Experts Weigh In On Trump Tariffs

The reciprocal tariffs imposed by the United States on all trading partners are "worse than the worst-case scenario", according to Brian Coulton, chief economist at Fitch Ratings.

Ahead of the US presidential elections, Trump had promised to impose 60% tariff on China, 20% on rest of the world and 10% on Canada, Coulton recalled. "But now, tariffs on Canada stand at around 12-15%. They are probably 65% on China, and at around 25-35% on East Asia," he said, during a televised interaction with NDTV Profit on Thursday.

The rest of the world is going to be a "lot weaker" after this tariff action, the economist said, adding that the US' trade protectionism is worse than the 1930s, when the country was plunged into the Great Depression. "This is like going back to the 1910s," he said.

Pramit Pal Chaudhuri, head of India practice at Eurasia Group, pointed out that the US became de-industrialised in recent decades, which requires the country to rejig or rebalance its economy to create jobs for the working class. However, tariff is the not the right way for this rebalancing as it will "trigger inflation and hit supply chains", he said.

Supply chains in Mexico, China and Southeast Asia are "deep rooted", and no one will move their plants to the US based on executive orders, Chaudhuri said.

For India, the expert said, tariffs don't matter that much as the country would likely be working out a bilateral trade deal with the US in the next six to nine months.

Trump is trying to use the tariffs to draw countries to the negotiating table and "extract a deal", said Anup Wadhwan, India's former trade and commerce secretary. Eventually, the 27% tariffs imposed on India will move out and whatever is decided in the bilateral deal will be worked out, he said.

For now, according to Wadhwan, India should go down the path of retaliatory duties.

Veteran investor Jim Rogers, who was also part of the interaction, criticised Trump for his push for tariffs that may stoke a global trade war. "I know trade war is bad. It isn't good for the world. Trump thinks if there is a trade war, he will win. But he will not," he said.

"I am sure of recession in the US. We haven't had a problem since 2009. A problem is overdue, and it is coming," added the 82-year-old, who is also co-founder of Quantum Fund.