Trump Tariffs: Anurag Singh on the economic fallout of Trump’s tariff gambit

“The point is, I do not believe that one set of people are saying, oh, this will invite retaliation. Well, what Trump has done is actually retaliation for years of free access to US markets,” says Anurag Singh, Managing Partner, Ansid Capital.

How do you think this entire move coming in from Donald Trump will sabotage the world order, given the fact that the economic engine, he is trying to actually move it, claiming that it will supercharge it, but does not look like that is the way how it is going to be. It is not more than a Liberation Day. It seems like a seismic storm that or quake that we are all witnessing at this point in time.
Anurag Singh: So, I look at it a little more constructively than much of the commentators are kind of putting it out to be. Here is my base case, there is time till April 9th. If a country has, for instance, India has 26% average tariffs, India can quickly ask the calculations of what, how did the Trump administration arrived at 56% of average Indian tariff and so, they can tomorrow decide that okay we will bring that 26, whatever, 56% to say 10% or maybe zero and then this 26% on India also goes back to zero, so that is one scenario.

The point is, I do not believe that one set of people are saying, oh, this will invite retaliation. Well, what Trump has done is actually retaliation for years of free access to US markets.

And now and I think I like the Australian PM’s response that, okay, they cannot appreciate this tariff, but they will not retaliate because by the way, how will they retaliate.

US needs global imports and global markets need US market access. It is up to every country to decide and kind of make a trade off as to what do they need more. They need to take the margin off or whatever, but they need access to US markets. They have got to make some compromise. It is a retaliation by the United States. There is no retaliation on retaliation, that is how I see it.

Let me get your views on this one, because almost unnoticed in this entire sweeping new import tariff that was announced by Donald Trump, one of them was the energy commodities have actually been excluded in this one. How do you view this entire thing given the fact that now US also is a huge producer?
Anurag Singh: Not only energy, there is lumber, there is copper, there is steel, aluminium. And there is semiconductor, there is pharma even, about 150 billion of European imports to US is about pharma. So, look, Seth makes a very interesting point, which is a valid point, there is no blanket approach to this. What upsets markets here is that despite tariffs, you cannot manufacture everything in US. Even if you put a 20% tariff, that is the healthcare premium in US for every employee. So, the point is, you got to pick your spots and try and target only those industries which are capable of being produced or substituted in within the United States.

There is no way you are going to make furniture or clothing or garments or any such thing in US, so I think that sense, this blanket approach seems a bit of a stretch.

Having said this, it will be kind of shared between both, some of the costs will be passed to the consumers, but at the same time I am sure some of the negotiations will happen between the countries in terms of eating up the margin losses from the exporters as well.

That said, there is another route. The rest of the world is about 10%, what has been happening till now is the China goods have been branded by other South Asian countries and they have been coming to US and I see now that there will be new spots kind of emerging globally which will have just 10% tariffs and stuff would be routed from there.

So, in a globally competitive market you got to pick because US is not and cannot be the manufacturing base for everything in the world and in that sense this seems to be a bit of opening salvo rather than the final cut and it is a bit of a volatility. We will have to take that.

I was just talking about the fact that it is amazing that he did not put outrightly and sweeping tariff on the energy commodities and that is exactly what you spoke about because it is not just the energy commodity, there are other segments also, or other sectors that he has not gone ahead with that sweeping sort of a tariff at this point in time.
Anurag Singh: So, see, the ideal position is that US does not want to put tariff on everyone, but you got to give some space. As I see it unfolding, if the countries can even give half a space that Trump administration is kind of looking at, Trump will be more than happy to just unwind all of it.

Because understand there are, and I think Seth made this pretty interesting point, people can only take as much damage to the 401Ks and that is a very sensitive issue here apart from Medicaid, Medicare, and all of the other stuff.

You cannot be sinking the economy into recession, that is something which nobody is going to take all in the name of creating jobs in US and I think Scott Bessent kind of needs to find the balance here. He is a sensible voice. We hope he will find a quick balance and the end game to this.