New Delhi [India], February 8 : Potential effects of the tariffs proposed by the Donald Trump administration are overwhelmingly negative, said a report published by a team of S&P Global Ratings' economics team.
The report was titled "Macro Effects Of Proposed U.S. Tariffs Are Negative All-Around."
The potential effects include slower GDP growth, higher unemployment and inflation, and a stronger US dollar. The effects on the US are smaller than for trading partners, S&P Global Ratings.
The Trump administration has moved quickly to propose a new 25 per cent tariff on goods imported from Canada and Mexico, and an additional 10 per cent tariff on goods imported from China.
Last-minute negotiations resulted in a one-month reprieve for both North American trading partners.
Uncertainty around the path of US policy and its objectives is high, the report said.
"Moreover, the ongoing deal-making mode of the new administration risks complicating long-term decision making by both firms and households," it cautioned.
The new US administration has made an aggressive start in the area of tariff policy.
On February 1, less than two weeks after his inauguration, President Donald Trump invoked the International Emergency Economic Powers Act (IEEPA) to announce sweeping new tariffs. In taking these measures, the White House cited the extraordinary threat posed by illegal immigration and drugs, including fentanyl.
Separately, government sources recently toldthat the trade war between the US and China is going to benefit India. There may be some products from India on which the US might take some action but despite this India's exports to US will increase.
Faced with US tariffs, China also retaliated and imposed 15 per cent tariff on coal and LNG and 10 per cent on crude imports from US.
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