How Trumponomics works for India, and how it doesn't
Donald Trump's economic policies and agendas, has once again alarmed the world after his historic comeback in the US presidential election. Based on protectionism, tariffs, corporate tax cuts, increased infrastructure spending, deregulation, immigration control and strengthening local manufacturing, Trumponomics aims at fostering economic growth, raising incomes and creating more jobs. But critics say Trumponomics can stoke inflation, add to fiscal deficit and favour the rich.
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Trump’s policies have a larger global footprint and will impact the growth-inflation dynamic in Europe and Asia, ET has explained. The two biggest trading partners of the US, the EU and China, could face slowing exports on account of retaliatory trade protection. This makes their currencies vulnerable with the renminbi being in the spotlight. Central bankers outside the US are likely to face higher resistance to interest rate cuts with their currencies under pressure. Corporate earnings could be depressed in industries such as semiconductors, automobiles and RE, which are more exposed to US tariff changes. Emerging economies will, in addition to higher trade barriers, have to deal with slowing capital flows due to rising US treasury yields and the dollar. This may lead to a reset of monetary policy across a wider group of economies.
The promise of Trumponomics for India
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