6 ways Trump’s tariff liberation day could shake global markets

Riya Sharma, ETMarkets.com

Mar 31, 2025

Could India emerge as a winner?

While global markets brace for impact, India could see limited downside—or even a strategic advantage. With exports accounting for just 12% of GDP, the economy is less exposed to tariff shocks. If US levies on China push buyers to seek alternative suppliers, India could gain market share. Strong domestic demand and a 6.6% GDP growth forecast for FY25 further cushion the impact.

US stock market volatility

The S&P 500 has fallen 9.17% from its February peak, with Friday’s sell-off reflecting tariff uncertainty. A prolonged trade war could erase post-election gains and deepen investor anxiety.

Inflation concerns resurface

New tariffs could stoke inflation by driving up consumer prices and squeezing household budgets. US consumer confidence has already plunged to a four-year low, signaling trouble ahead.

Auto industry takes a hit

Trump’s 25% tariff on foreign-made cars could add thousands of dollars to vehicle prices, hammering automakers like GM and Ford. Shares in these companies have already tumbled in anticipation.

Fed rate cut expectations shift

With non-farm payrolls expected to show the weakest job growth since October, a tariff-driven slowdown could push the US Fed toward more aggressive rate cuts. Markets have already priced in two cuts, and with recession fears mounting, the odds of a third cut this year have risen to 50%.

Commodities and currency markets in flux

Copper prices have surged in anticipation of tariffs, widening the gap between New York Comex and London Metal Exchange prices. Currency markets remain volatile as traders weigh trade war risks.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)

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