IMPACT OF TRUMP POLICY AND UNCERTAIN GLOBAL ECONOMY.

GLOBAL GROWTH OUTLOOK 

Growth trajectory of the world economy has indicated that since the end of Covid19 pandemic turbulence varied from supply side disruptions, energy and food crises triggered by Russia Ukraine war,tensions in middle East, surge in inflation tightening monetary policy and increasing debt levels and increased debt service cosrs.January 2025 update of World Economic Outlook IMF has projected 3.3% growth for both 2025 and 2026 as against historical average of 3.7% during 2000-19.The estimated global growth for 2024 was 3.2%.For advanced economies estimated growth was was 17.% and growth projections were  1.9 % in 2025 and 1.8 % in 2026.whereas for USA estimated was 2.8% and projected were 2.7 and 2.1 respectively.Canada estimated 1.3% of GDP for 2024 and projected growth was 2.0 % both for 2025 and 2026 respectively. Germany estimated growth was -0.2% in 2024 and projected growth were 0.3 in 2025 and 1.1% in2026.Japan also reported estimated negative growth-0.2% in 2024 and 1.6% and 2.0 % in 2025 and 2026 respectively.  Growth of emerging and developing economies estimated to be 4.2% in 2024,growth projected for 2025 and 2026 were 4.2 % 4.3%.Emerging Asian Developing Economies showed better performance compared to any other group with estimated 5.2% in 2024 and projected 5.1% and 5.1% respectively in 2025 and 2026.It may be noted here that while China's estimated growth for 2024 was 4.8% projected growth  for 2025 was 4.6% and 4.5% for 2026.For India on the otherhand it was estimated 6.5% in 2024 and 6.5% in 2025 and 6.5% in 2025.According to the IMF update Global  headline inflation  is expected to decline to 4.2% in 2025.and to 3.5% in 2026.

DONALD TRUMP'S POLICIES 

After assuming office as the 47th US President Donald Trump signed executive orders to overhaul border energy policies and end diversity programs across federal government.According to Trump America is determined to reclaim its rightful place as the greatest most powerful most respected nation on earth.Trump's immigration plans include ending birth right citizenship for children born in the US to mothers who entered illegally or on visas and fathers who are  not  citizens or  legal permanent  residents. This executive order is likely to affect thousands of Indian professionals working in US under H1-B Visa and other temporary visas  who is aspiring to raise their families in USA. About twenty two states are planning to take legal remedies for restoring  the earlier birth status quo of birth right citizenship.Reports indicated that India will have to take  back 18000 illegal India migrants caught at US border immediately. Similarly US exit from both  Paris Agreement on Climate change and globally acclaimed World Health Organisation (WHO)is major set back to humanity as well as Climate change negotiations especially when morbidity conditions across the world is changing and onslaught of global warming, hurricane, landslides, floods and droughts and forest fire especially in US are experienced.Most significantly  not only t he vulnerable countries but also developed countries including USA which remains as the second largest greenhouse gas emitter.Trump almost ended the environmental Protection Agency rule that required auto manufacturers to cut Green house gas emissions by half in New light and medium vehicles beginning in 2027

New tariff policy threatens to  0proposed 100% tariff on BRICS countries including India if they take steps to replace the US dollar( through Dedolarisation) in global trade .There is a risk of trade war as Trump threaten to impose 10% global tariff and 60% tariff on China.If they tariff imposed on China is 20%-it will reduce China's GDP about 0.6% from 2025-27.On the other hand if 60% tariff is imposed on China the estimated loss of GDP would be 2.5 % during the period 2025-27.After two days he clarified that Imposition of 19 % duty on imports from China from February 1st.later he cl India also faced criticism for its high import duties on American motorcycles leading to strained trade relations  and  unhealthy economic enviornment. President also threatened to double tax rates for foreign nationals and companies in the US to hit back at "discriminatory " levies on American multinationals in a move that threatens to trigger a global dispute over tax regime. In this context he is referring to an obscure 90 year old  US tax code- Section 891 that empowers him to retaliate against countries by imposing punitive taxes on their citizens and businesses in US. Trump declared a national border emergency and ordered the US armed forces to repel"forms of invasion "  at the US Mexico border including drug trafficking and illegal migration. The executive order intends to rename " Gulf of Mexico " to " Gulf of America ".

IMPLICATIONS OF TRUMP POLICY 

US policy on energy, environment ,climate change, trade, tarrifs, citizenship route, border control and immigration are subject to discussion and debate. However Indian foreign minister S.Jaya shanker was invited to attend the inaugural ceremony and hold bilateral meeting  with US Secretary of State Marco Rubio.about strengthening QUAD. The threat to impose 100% tariff on BRICS nations are both irrational and  Impractical. Rise in tarrifs are bound to increase the prices of commodities traded.However so far  India has not been directly targeted,  accordingly Government is adopting a wait and watch approach.. The basic argument put forward for Imposition of tarrifs is that the world has benefitted from low US tariff and that has affected,manufacturing and decline jobs in US.Thus increasing tariff will not make imports more expensive. In any case India will have to tread carefully  particularly when the US president is threatening to impose 100% tariff on BRICS countries if they attempt to move away from from the US dollar. Stringent immigration rules,abolition of birth right citizenship,Declaration  of border emergency and crackdown on illegal and undocumented migrants and plans to crush the hopes of H1- B Visa holders  are very much there  . Moreover by cancelling the automatic route to citizenship for children born to immigrants  in the US,  approximately 725000 undocumented Indians are facing challenges of deportation in large numbers; beginning with about 18000 - 20000.Simllarly US being the largest trading partner we have to meticulously examine the possible impact of Trump's America first policy and devise measures to continue trade and investment even at sector wise or product wise levels if required. 

CURRENT US ADMINISTRATION HAS INHERITED RELATIVELY STABLE AND VIBRANT ECONOMY BETTER THAN  THAT OF EUROPE AND JAPAN.BUT THE OUTCOME OF PRESENT POLICY CHANGES ARE LARGELY UNCERTAIN. 

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