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BUSINESS EYE NOVEMBER 15, 2024 | The Indian Eye 32

Will Trump’s tariffs against China make funds

flow to economies like India?

India, viewed as a manufacturing alternative to China, is appealing to investors for

its relative immunity to global risks given a domestic-driven economy

OUR BUREAU
Washington, DC
onald Trump’s election victo-
ry is seen changing the course
Dof near-term money flows for
three of Asia’s largest equity markets
as tariff risks loom large over Chinese
assets.
Market watchers see the possi-
bility of funds flowing into India and
Japan while investors assess Trump’s
anti-China stance, with the presi-
dent-elect earlier having threatened
to put tariffs of as much as 60% on
Chinese goods. Morgan Stanley just
reiterated its preference for the two
nations’ shares over China’s, accord-
ing to a Bloomberg projection.
India, viewed as a manufacturing
alternative to China, is appealing to
investors for its relative immunity to
global risks given a domestic-driven
economy. Japanese stocks are seen
as indirect beneficiaries of Trump’s The financial aid provided to the Chinese producers has resulted in them selling their products at lower prices than compared
reflationary economic policy — which
is expected to keep interest rates high, with those of their European competitors (File photos)
thereby boosting the dollar and weak-
ening the yen to the advantage of the This makes the nation’s ongoing leg- and diminish the competitiveness of for Tesla, it is 7.8 per cent, BYD, 17
Asian nation’s exporters. islature meeting all the more crucial US businesses. per cent; Geely, 18.8 per cent; SAIC
“Supply chains have been moving for investors. Meanwhile, the European Com- at 35.3 per cent; other EV producers
away from China and that helps not In a recent interview, Trump was mission has given the final green light in China who cooperated in the inves-
only Japan and India but also other asked whether he would consider to steep tariffs on electric vehicles tigation but have not been individual-
countries, particularly in Southeast military force in response to a poten- (EVs) made in China, officially clos- ly sampled, 20.7 per cent, and other
Asia,” said veteran emerging-mar- tial Chinese blockade of Taiwan. He ing the probe that began one year ago, EV producers in China who did not
ket investor Mark Mobius. “India is asserted that such action would not as per Euro News. They are set to re- cooperate, 35.3 per cent.
the big beneficiary since only India’s be necessary, claiming that Chinese main in place for the next five years. The financial aid provided to
workforce can match the Chinese in President Xi Jinping respects him, Brussels will continue negoti- the Chinese producers has resulted
numbers and labor costs. With Trump stating, “I wouldn’t have to, because ations with Beijing so as to secure a in them selling their products at low-
maintaining or even extending trade he respects me and he knows I’m f-- deal on minimum prices that can re- er prices than compared with those
restrictions on China, this will be pos- crazy.” place the tariffs. It was observed by of their European competitors, the
itive for India.” Trump, who served as President Euro News that this solution which Commission attested.
That suggests Wednesday’s price from 2017 to 2021, previously adopt- was advocated by Germany is highly Because of this it was observed
action in Asia is likely to have been a ed a tough stance against China, im- complex and would be difficult to im- that the Chinese firms’ EV sales in
sign of things to come. As it became plementing multiple rounds of tariffs plement. Europe have increased at extraor-
clear that Trump will return to the that sparked a trade war and had As per Euro News, the entry into dinary pace with their market share
White House, the MSCI Japan Index widespread implications for the glob- force was widely expected after the jumping from 1.9 per cent in 2020 to
and the MSCI India Index rallied at al economy. inconclusive vote earlier this month 14.1 per cent in the second quarter of
least 1.5% each to cap their best day US Secretary of the Treasury where member states failed to mount 2024, according to the Commission’s
so far this quarter, while the MSCI Janet Yellen has described Trump’s the necessary majority in favour or estimations.
China Index slumped over 2%. idea of sweeping tariffs as a “deep- against the measures. “There’s a clear and imminent
The threat of tariffs is seen com- ly misguided” approach in a speech The Commission invoked its threat to our car industry not making
plicating Beijing’s efforts to revive at the Council on Foreign Relations trade powers to break the impasse the transition to electric vehicles and
the economy and lift market senti- on Thursday, October 17. Yellen and approve the duties, which come being therefore wiped out,” a senior
ment through a series of stimulus warned that broad tariffs would like- on top of the existing 10% rate and EU official said on Tuesday, speaking
measures that began late September. ly raise costs for American families vary according to brands. For instance, on condition of anonymity.

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