Trump trade expected to reverse soon as tariff concerns rise: Sunil Subramaniam

economictimes.indiatimes.com:

By and large, the Trump trade that has happened will reverse in the coming weeks. The reason for that is two things. First is Trump on tariffs. While the rhetoric and the talk has been very high, implementation of those tariffs would lead to a spike in inflation for US consumers, that is not something Mr Trump will want. So, he will be more pragmatic about it, says Sunil Subramaniam.

ET Now: Should Indian equity investors brace for impact at the top of the next week or do you think more or less we have priced in already what Trump could do?

Sunil Subramaniam: It is a large deal, it is priced in and also the markets buy on the rumour and sell on the fact. So, a lot of the rumour-based buying has happened and the Trump trade that has happened, yes, Trump is also not likely to make announcements immediately on inauguration. So, give it a couple of weeks. But by and large, the Trump trade that has happened will reverse in the coming weeks. The reason for that is two things. First is Trump on tariffs. While the rhetoric and the talk has been very high, implementation of those tariffs would lead to a spike in inflation for US consumers, that is not something Mr Trump will want. So, he will be more pragmatic about it. He will use those as a negotiating tool to get down import prices from all the countries, that is number one. Number two is the market has talked up the dollar because they expected American businesses to rebound and Trump to support them through tax cuts and the like. But a strong dollar, it goes against