By laksh5382 
Donald Trump described on April 2, 2025 – the day’s mutual tariff was introduced – as the most important Economic Liberation Day in American history. However, the move was widely considered domestic and globally as a regressive step, which was a shock for the international trade system. Since post -World War II era, there has been a considerable expansion due to continuous decrease in international trade. Tariff Obstacles. The concept of mutual tariff stems from an arbitrary functioning to calculate a remarkable tariff on a country, based on a trade deficit with the US. Apparently, it is quoted on the basis of non-financial obstacles such as currency manipulation and commercial obstacles, which are to block market access to America in respective countries.
The global market takes it with a blow. The US market has a decline of 4% in the last two days and Asia is a more hit, Japan has a 10% cut. India is handling it better, given that the business barrier implications are less than the rest of the world. Like other Asian peers, like ChinaVietnam, Taiwan and Indonesia, are clubs in high brackets of 26 to 46%. Fully increased Tariff war The landscape, according to the ‘The Economist’, China, can withstand a overall tariff burden of up to 65% under the mutual outline. India’s relatively better situation is also attributed to the ongoing interaction with the United States towards a bilateral trade agreement, which can help reduce the adverse effects of mutual tariff regime.
Some areas such as pharma, semiconductors and energy oriented commodities and products are excluded from tariff measures. This discount performs relatively better in India’s pharma, manufacturing and energy sectors than its global counterparts. In a barrier, it is highly laudable that domestic -oriented industries such as Agriculture, FMCG, finance, industrial, infrastructure and cement standout are protected from the direct effects of tariff effects. However, as global markets experience significant stress, Indian markets are also likely to face close-term weakness. Despite this, India is expected to demonstrate relative outperformance compared to other major economies amid global recession.
Despite India’s relative advantage, with high performance for many Indian regions American market American demand is under pressure amid hopes of recession. The IT sector is particularly affected, because by increasing technology expenses and American interest rates – currently, compared to 4.5%, compared to 2.5%of the European Union – 2.5%compared to 2.5% – on business prospects. Major Indian IT firms spend between 50% and 80% of their revenue from the US, especially weakening them. While the pharma region remains relatively untouched for now, other export-oriented industries are facing increasing risk under the business environment developed for us auto accessories, textiles, aquacultures, and basmati rice.
The risk of retaliating measures against the United States is increasing, especially from major trade partners such as Europe, China, Japan and Canada – is reducing economic decline. Should the tariff war move forward, the possibility of American recession will increase to a great extent in the coming year. At the beginning of the year, the possibility of an American recession was 20%, but it has since increased by 40%, which reflects growing concerns over business disruption. Currently, a base line Mutual fee All American trading partners have been applied 10%, with increasing supply chain challenges expected to reduce global trade and economic speed. This, in turn, can weigh heavy weights on future earnings and market evaluation.
Meanwhile, domestic Q4 Income The season is ready to start next week. Expectations are modest on a yoy base, although the improvement of sequential (QOQ) is estimated. Economic figures suggest a strong reversal in economic activity between January and March. However, given the high base of the final Q4 of FY25 and 7% EPS increase for India in FY25 throughout the year, the initial estimate for Q4 is 8–10% yoy income. This is below India’s long -term average growth rate at 15%, indicating that it will not be taken positively by the market. Its effect is likely to weaken due to negative bias under global clampdown. The result will be initiated by the IT region, where estimates and approaches are weak due to a breakdown in the US.
The author, Vinod Nair is the head of research in Georgit Financial Services.
Disclaimer: The above views and recommendations are of individual analysts or broking companies, not Mint. We recommend investors to investigate with certified experts before taking investment decisions.