The US reciprocal tariff policy has officially kicked in, creating uncertainty and tension across global markets. On Day 1 of implementation, multiple countries were unclear about specific tariff rates but began bracing for the economic impact. In this Oneindia exclusive, Pankaj Mishra speaks with California-based Logistics and Supply Chain Management Executive Marutha Bharathi on how the US reciprocal tariff policy may hit domestic industries, affect consumer prices and alter America's trade ties with key partners like India and China. India has termed the move a ‘mixed bag,’ while talks for a broader trade deal continue.
#USReciprocalTariffPolicy, #TradeWar2025, #IndiaUSTrade, #TrumpTariffs, #GlobalEconomicShift
~PR.282~HT.336~GR.124~
#USReciprocalTariffPolicy, #TradeWar2025, #IndiaUSTrade, #TrumpTariffs, #GlobalEconomicShift
~PR.282~HT.336~GR.124~
Category
🗞
NewsTranscript
00:00Hello and welcome to this very special broadcast on One India, while Donald Trump has actually
00:18spoken what he had to, and after that, the fallout, the tumblings of the trade barriers,
00:27the relations, and the possibility of what lies next for so many countries who have been
00:33doing trade with America, depending on them, maybe importing or exporting items from them.
00:40The big question as of now here is whether those countries would retaliate or they would
00:46take a lying down what Donald Trump has announced. The jury is still out and to measure the intensity
00:54and to discuss the matter that where does it stand and why these tariff issues are important
01:00and innate, not just to the world, but also for the Americans. We are joined by Marutha Bharati,
01:07all the way from California in the United States. Marutha is a member and a businessman into the
01:16logistics and supply chain field. Marutha, thank you so much for speaking to One India,
01:21quite a hectic day, I would say there. Of course, yes. And thank you, Pankaj,
01:27you know, for the opportunity and to address this issue. Yeah, it has been a busy few weeks
01:34and a busy few hours, even more. The big announcement that Donald Trump also that
01:44the plug in his hand also spoke a lot of volumes and you being from logistics and supply chain,
01:49an industry, a sector which would be directly impacted, if I'm not wrong,
01:53we would be coming to that, Marutha. But before that, I want to understand from you
01:58the United States domestic situation. Let's start from home where you are. What impact
02:05these tariffs have on American consumers and businesses? And will they truly protect
02:11US industries or lead to higher costs and job losses there?
02:16So that's a very important question to address. And also, before I go into that, let me try to
02:23understand or characterize what are the objectives that the President Trump is trying to achieve
02:28here, you know. So one is, of course, to re-industrialized the US, it has lost a lot
02:35of manufacturing capacity over the last two, three decades, you know, they want to get some
02:39of that back. And they want to get some of the manufacturing jobs back, especially in the
02:43Midwest, where it kind of got hollowed out over the past two decades. So and then the other
02:49objective is to reduce the budget gap. There is a huge US trade deficit, you know, so not only
02:56trade deficit, the budget deficit, which has been very popularly spoken about everywhere. So one of
03:03the direct things that they are anticipating out of this tariff action is, you know,
03:08high collection of customs duties. I was even listening to some analysis today morning, which
03:15was as high as $600 billion per year or something, you know, that seems like a really high number,
03:20you know, that's the amount of money that they're anticipating for the tariffs, which could help
03:25fill up the gap to some extent. But there is also an expectation, there will be more investments
03:30because of this, because of plans coming back to the US, that's spurring economic growth,
03:36and which will also eventually help bridging the gap. These are the stated objectives, right?
03:41But can production shift that quickly? And that effectively, you know, that's,
03:47that's a million dollar or billion dollar question, you know, maybe even a trillion
03:50dollar question. So my take is, it might be slow and strategic, rather than, you know,
03:57so one of the things any brownfield project in the US or greenfield projects in the US,
04:03so even plan, and to get to a stage of construction and starting, it takes about one,
04:09one and a half years, and then subsequently, another one, one and a half years to construct
04:14the factory has trained employees, and to get there. So these capacities are not going to be built
04:21overnight. But there's, of course, already capacity available, which might get utilized a little
04:26better now. So, but given the cost arbitrage, you know, I was seeing some analysis today morning,
04:35that the labor cost arbitrage between the US and even Mexico, for example, for highly skilled
04:42manufacturing job, maybe $70 in the US per hour, vis-a-vis $8 or $10 in Mexico, right?
04:51This could be similar for China or any of the emerging economies, you know, so it may not,
04:57it may not happen that all these industries may not move back to the US, you know, for example,
05:02footwear or garments may not, right? So there will be strategy, little bit more high end,
05:09little bit more value added manufacturing might move back, you know, and especially the ones which
05:14are politically sensitive, like auto and steel and aluminum will, you know, probably move,
05:21you know, slowly, but it'll move. And on the question of consumer impact, right? I think
05:28that is where I think the bigger focus needs to be and rightly so, because this is definitely
05:34going to be inflationary, you know, we can't escape that, because the tariffs are pretty steep.
05:39So, the Fed's initial take was that this is going to be transitory. But this was before
05:46these announcement came in. So we have not seen a newer analysis from them yet.
05:51But there is the real serious concern in the community in Wall Street and everywhere is,
05:57will this lead to stagflation, right? So can the economy stagnate and at the same time have
06:03high inflation? That is a question that, you know, we don't know an answer to. Hopefully,
06:09it doesn't spiral into that, you know, so yeah, and business confidence is low, the markets are low.
06:18So the investment might be a little bit slow to take off until clarity emerges. But I don't.
06:25So, I mean, one of the things I take it as a thumb rule is that, you know,
06:30never against the US economy, and the US people, they're pretty resilient. I think they will find
06:36solutions out of this. I think this is not a permanent situation. I think it is probably a
06:42starting point for negotiation. I think we will, things will start changing and become, you know,
06:48improving. That's my overall take on this. Absolutely. That positive thought process
06:55must continue. But as far as this morning, performance at the New York Stock Exchange
07:01is concerned, not very healthy, not very encouraging, I would say, and similar situations
07:06here in Asian markets as well. Gold, on the contrary, has gone up like anything. So obviously,
07:13people are going for more secure investments and possibly, you know, not looking at any other
07:19option. Marutha, you come from India, you have traveled, you have stayed in India,
07:24at different places, be it the commercial capital Mumbai to the tech capital of India,
07:30that is Bangalore. Where do you see that New Delhi stands as of now? And what possible strategies or
07:35course corrections do you think that you or your company or the sector on the whole needs to make
07:41in order to fit in to this new matrix? So I don't want to see this as an end point. So in that sense,
07:48I don't want to judge it as a win or a lose for either side. So I would rather say that this is a
07:55momentary point, you know, a point in time. So I think we should look at it as a maybe,
08:04I think there is probably already back channel discussions going on between India and the US.
08:09India and US have been natural partners for a long time. And that is reflected in the trade
08:14growth we are also seeing. So I don't think that it's a, I think we have to look at this
08:20from that prism all the time, you know, for the long term view, we are noisy democracies, our
08:25cultures are pretty similar, very entrepreneurial people on both sides. So the trade is only going
08:30to grow, irrespective. So and relatively, we are not one of the worst impact. So
08:39and I have a feeling that, you know, being Trump is known for willing to make deals,
08:46I think India should reach out, you know, make it a little bit more easier for the US businesses to
08:52do, US to have more market access in India, make it a little bit more for US companies to invest
08:59in India. I think good on a little bit of give and take, I think will benefit both countries.
09:04And that will deepen our relationships even further. So I'm, I think this might be an
09:11opportunity, you know, so that is, so I don't see this as a win or a loss at this stage.
09:15Okay, that's fair and square, I would say. But Marutha, taking a bird's eye view of,
09:21you know, the look at the larger picture here, in the Asian continent context,
09:28do you think that these tariffs are somehow aimed or targeted at China and India, or the Asian
09:36subcontinent on the whole? This is interesting. You know, I have a mixed response to yes,
09:42in terms of effect, it has a severe impact on the China, the Southeast Asian economies,
09:49I would call them actually China cluster countries. So I have a reason for that. I'll
09:55come back to it later. So these countries seem to be affected more because their tariffs are high.
10:02But if you look at the way they have approached on how to arrive at this reciprocal tariffs,
10:06I don't think so that was the intent. So the formula is pretty simple. You know,
10:11since yesterday, you know, there's been a lot of things on the web, you know, everywhere
10:15circulating how they've arrived at these numbers, it's simply based on how big your trade gap is
10:20divided by how much imports are you bringing into the US from your respective country. And
10:26there is a straightforward formula. And then they have divided that by two, and
10:30then they arrived at a rough number. So with the base tariff of 10%, of course, that's a
10:36different thing. Let's come to that later. So China and these Southeast Asian countries,
10:41especially Cambodia, Vietnam seem to have been really severely impacted. I believe even China,
10:47the 34% was not just 34, it's 34 on top of already announced 20%. So which makes them also
10:53over 50%. So China is 54%, Cambodia is 49%. And I think Vietnam is I think, 44%, something around
11:01that. So these are very high numbers. So in effect, yes, it has impacted them highly. And then,
11:08but that doesn't seem to be the intent. You know, since we are discussing China,
11:14now we have seen in the past as well, be it the COVID times, Donald Trump and China don't go well,
11:23at least as far as the press interactions are concerned, as far as the public opinion being
11:29shared is concerned. There are two things that are being talked about. You mentioned the first one
11:36correctly is about maybe sweetening the deal, maybe starting the back channel talks. But when
11:43it comes to the second aspect, trade war, that is also coming in from all sectors. Let's begin with
11:50China, before we go to EU and other countries. Trade war, do you see any fallout going ahead
11:56between the US and China? You are very right in pointing out the trajectory of the US-China
12:01relationship has not been in a positive path over the last 10 years or so, which is understandable.
12:08You know, it is not just President Trump, I think even the next administration was pretty much on the
12:13same trajectory. So there is no love lost. I mean, and there will of course, and China has to
12:20react publicly. So of course, they will do something, you know, pretty soon. They haven't yet announced
12:25anything, but I'm expecting that they will do something where it hurts the US a little bit.
12:30But I think they are also very pragmatic. And unlike the last time, I have a feeling China is
12:35super well prepared this time. I think they have already built a war chest is what I understand
12:40in terms of spurring local economic growth. I think they've got this as an opportunity to
12:46diversify their dependence away from US into making more deals with other countries around
12:53the world, and focusing extremely highly on the domestic economy. So beyond the initial rhetoric
13:01and reactions, I don't think so that this is going to escalate into a major trade war. And
13:07yeah, that is my expectation. That doesn't mean there will not be impact, but it may not be
13:14an outright trade war. Okay, one final question in the interest of time.
13:21Now that, you know, it is certain that the US has rubbed China, EU, India, to a certain extent,
13:27the wrong way. If there are countermeasures, do you think that such a huge consumer base and you
13:34being part of logistics, can United States afford to antagonize this particular belt of consumers?
13:45Or is it there is a silver lining somewhere down the line?
13:48You know, as I said, the answer lies in how we want to look at it. Is it temporary? Or is it
13:54a permanent reality? Right? So I have a feeling that the European Union, Indian government
14:02response, even though the rhetoric might be sharp, I think they will be very calculated,
14:09very calibrated, and a very measured response from their side. You know, Europe is already
14:13talking about phased tariffs and retaliation. So there will be room in that for negotiations
14:19and settling down at a more accommodated situation. And so, I don't think that this is
14:26permanent. So, I mean, I think every country will take it that way. I saw a reaction from
14:33Australia PMS today, you know, again, very sharp rhetoric, but they said they're not going to react
14:39to this. Right. So I think that is the kind of tone I expect from most of the countries.
14:46Sharp rhetoric, but measured actions, and a lot of back channel discussions to settle this.
14:53So, so I don't want to really be alarming, alarmist at this stage. So,
14:58as on the consumer side in the US, you're right, you know, it will impact a little bit quicker.
15:05But let's see how quickly you know, they can make deals with these countries.
15:08Right. Thank you so much. Once again, obviously, it's all this hype and hoopla, you know,
15:15be the tariffs be the domestic situation. There is one common thread that Donald Trump at least
15:21must not lose sight of is make America great again, MAGA. That is something that he has to
15:27deliver upon. Thank you so much, Martha. The world is yet to come to terms of what Donald Trump has
15:33announced on the evening of 2nd of April. Thanks for watching this broadcast.
15:41Thank you. Don't miss out. Log on to OneIndia.com for more updates.