Global Growth at Risk? Jahangir Aziz weighs in on tariff impact

«If VAT tax is included in the reciprocal tariffs, then first of all the level of the tariffs obviously is going to be much higher and the countries that will be most affected are also going to be different,» says Jahangir Aziz, JPMorgan.

Big night tonight for us here in India. The Trump administration is set to unveil the reciprocal tariffs. Tell me, will US reciprocal tariffs directly match other country tariffs or will the scope be wider you think? And which countries, according to you, are likely to get impacted the most?
Jahangir Aziz: So, we are looking at various variations of this. So, one of them obviously is that it just matches the reciprocal tariffs, in which case the countries that will be most affected are countries like India and Brazil, who have very large tariffs differential with the US. But at the same time, there is a sense that the reciprocal tariffs will not just be about tariffs differential, but it will also include what the US administration calls non-tariff barriers.

And one of the things in the non-tariff barriers is the VAT rates. US does not have a VAT tax in the US. It has state level sales tax. Most other countries, most of its major trading partners have VAT tax. And if VAT tax is included in the reciprocal tariffs, then first of all the level of the tariffs obviously is going to be much higher and the countries that will be most affected are also going to be different.


What are your thoughts on the impact of reciprocal tariffs on global growth and will global growth be