IMPACT OF TRUMP ADMINISTRATION ON GLOBAL ECONOMY: WITH SPECIAL REFERENCE TO INDIA

IMPACT OF TRUMP ADMINISTRATION ON GLOBAL ECONOMY WITH SPECIAL REFERENCE TO INDIA - *Dr. S. Vijay Kumar The United States is a most powerful democratic, technologically innovative with advance research and development in the world. The U.S. dollar is largely used in the international transactions, backed by stable government, and with its most powerful military in the world. The United States has a larger immigrant population than any other country in the world. Every year, millions of people come to the US for higher education and employment. USA is a model to the world for democratic government and individual liberty. Americans have one of the highest levels of disposable income in the world. America in the past, present and in future will be a nation of immigrants. It is unequivocal that today’s developed America is due to the efforts of many intellectuals from different countries of the world. Unless someone is 100% Native American, every family came from somewhere else. At some point, someone in a family made a decision to leave their homeland and start a fresh life in America. That decision—to take a risk, to seek for a better future, to believe in something greater—is what defines this country. Yet today, we are seeing policies that deny this truth. The latest immigration actions by the Trump administration—ramping up deportations, tightening asylum rules, and making legal immigration nearly impossible for many—are not just cruel. These policies not only contradict the values, America has historically upheld; they also betray the spirit of inclusivity and opportunity that has defined the nation for generations. Throughout history, U.S. has prided itself on being a beacon of hope for those seeking freedom, a land where people from all corners of the world could build new lives and contribute to the country’s growth. The Trump administration’s actions represent a stark departure from this tradition, favouring exclusion over the embrace of immigrants who have long been integral to America’s identity and success. These policies stand in direct opposition to the nation’s founding principles, threatening the very essence of what makes America a land of opportunity for all. Donald Trump’s own family history is deeply rooted in immigration. His grandfather, Friedrich Trump, emigrated from Germany to the United States in 1885, seeking economic opportunities. His mother, Mary Anne MacLeod, was born in Scotland and moved to the USA in the 1930s in search of a better life. Despite his own immigrant heritage, Trump’s policies and rhetoric often targeted the very communities that reflect his family’s journey, highlighting the contradictions in his stance on immigration. Think about what America would look like if immigrants had never come. No railroads spanning the country, because it was Chinese and Irish immigrants who built them. No skyscrapers in our cities, because European immigrants and their children constructed them. No Silicon Valley, because many of the most successful tech companies—Google, Tesla, and Apple, to name just a few—were founded by immigrants or their children. No jazz, no hip-hop, no country music, because Black, Latino, and immigrant communities shaped those sounds. No pizza, no bagels, no tacos, no sushi, no Vietnamese pho, no Ethiopian injera. Software experts from India, for example – Satya Nadella CEO of Micro Soft and Sunder Pichai CEO of Google developed software skills. Several workers, doctors, teachers, serving in military, business people keeping US economy thriving, and scientists who drive innovation. They contribute billions in taxes yet are often they are denied the benefits for their money. Yet despite their enormous contributions, immigrants are too often overlooked, underpaid, and denied basic rights. *Head & Professor (Associate) of Economics (Retd.), KGC (A), Hanamkonda, Ex - Member Board of Studies, Kakatiya University, Warangal. America relies on immigrants for its prosperity, yet policies continue to treat them as expendable rather than essential. America has always been stronger when it opens its doors. The idea that immigration is a “problem” is a blatant lie. I strongly assert that without immigrants today USA might not have achieved such a glorious victory in several fields like in advanced research, science and technology, industry and also in the infrastructure building. Thus, Immigrants are the backbone of America today. “Live, and Let Live” should be the slogan. There is no wrong in Trump’s policy regarding deporting illegal immigrants, but at the same time it is not correct to trouble legal immigrants who are contributing for the development of America. America is a great democratic country which respects individual freedom like India. In the middle of the 20th century, after decades of war that ravaged societies and economies, American leaders and their counterparts recognized that a peaceful, integrated world was needed to more effectively advance national interests. The United States has served as the architect and anchor of this global order ever since, creating the alliances, institutions, and norms that set its terms and conditions: trade conducted in U.S. dollars, security partnerships underwritten by American military power, and democracy premised on a separation of powers with attendant political rights and freedoms. For nearly a century, American leaders have recognized that global problems require cooperation and mechanisms to resolve differences in ways that avoid costly wars and economic destruction. Because of this view, Americans today have lived more prosperous, peaceful, and free lives than those of previous generations. Impact on US Economy: In his second term Donald Trump has torn up the rules of international trade, imposing high tariffs on America’s trading partners. On July 31st 2025, he announced revised rates on imports from more than 60 countries. Investors fear that whatever their eventual form they will stoke inflation and depress economic growth. It is too early to analyse much effect on the US economy. As per the statistical data available up to 31s1st August,2025 though, GDP grew in the second quarter, but the healthy headline figure was flattered by a sharp drop in imports (in the first quarter the reverse was the case). But strains are starting to show: retail sales are weakening, housing starts have dropped to their lowest since mid-2020 and an immigration crackdown is tightening labour supply. And the labour market may be softening: America added just 73,000 jobs in July, far below economists’ expectations. Donald Trump's policies could also rekindle inflation, which cooled following a series of interest-rate hikes that the Federal Reserve began to unwind this year. The Peterson Institute for International Economics, a US think tank, estimated it could add between two and four percentage points to China's inflation rate. The impact of "immigration policy is as important as global trade" on inflation, noted for his part Gilles Moec, chief economist at insurer Axa. If Trump follows through with talk of a massive expulsion of unauthorised immigrants it could aggravate the labour shortage in the United States. The Pew Research Center estimated that 8.3 million unauthorised workers could be affected. The Peterson Institute for International Economics estimated this could add more than two percentage points to the US inflation rate next year, 0.2 percentage points in Europe and 0.6 percentage points in China. Moec noted the surge in inflation would force central banks to hit the brakes on the cycle of interest rate cuts they began earlier this year as inflation subsided. Analysts had been looking at lower interest rates to spur consumers to spend and companies to invest and put some more wind into the sails of the global economy. Trade War: Asia accounts for 60 percent of global growth, but would be hit hard by a trade war between the United States, India and China, the International Monetary Fund warned. The United States has also been one of the fastest growing developed economies but Trump's policies risk shaving two percentage points off US GDP per year between 2027 and 2031 from baseline estimates, according to a forecast from the Peterson Institute. Trump’s tariffs are expected to cost the average American family $4,600 annually, with the greatest impact felt by low and middle-income households. Politicization of Government Institutions: Domestically, Trump is expected to undermine the independent prosecutorial role of the Justice Department as he pursues political opponents and seeks to suppress what he sees as the ‘deep state’. Without an independent and objective federal prosecutor, there is likely to be a significant weakening in business standards. This does not mean the end of the rule of law – federal courts and state systems of justice will continue to operate as now. But without an independent and objective federal prosecutor, there is likely to be a significant weakening in business standards across the board. At the same time, the push to reduce civil service headcount combined with a much deeper than usual politicization of the remaining bureaucracy and possible growth in favoured company influence (‘crony capitalism’) would over time see a widespread deterioration in the quality and effectiveness of the US civil service. The Trump Administration has Caused Long-Lasting Damage to One of the Foundational Pillars of U.S. Economic Strength & Stability. In just a few months, the Trump administration has threatened to levy tariffs, actually levied tariffs, and backed down from tariffs at breakneck speed—whipsaw policies that have generated enough uncertainty to increase concerns of a global recession. The Trump administration’s trade policy has also had significant impacts on the bond market, as investors increasingly see the United States as unreliable and therefore have begun to look elsewhere for safer returns. And though many nations may cooperate with Trump in the short term, the chaos and failure to articulate a coherent logic around economic policy has left foreign partners with no reason to trust the Trump administration in negotiations. The uncertainty is also bad for businesses. Both global corporations and small businesses tend to refrain from making major investments—drivers of new employment opportunities—under conditions of uncertainty. In sum, the Trump administration has caused long-lasting damage to one of the foundational pillars of U.S. economic strength and stability. Undermining American Competitiveness: The Trump administration’s unilateral trade war is not just bad for consumers; it is also harmful to the interests of many small- and medium-sized manufacturers who rely on imported parts and materials—particularly those from China—to support production in the United States. In fact, many U.S. producers will face both higher operating costs due to more expensive imports and a major decline in export competitiveness, as countries such as China and Canada place tariffs on U.S.-made goods and foreign buyers avoid products identified with the United States. The Center for American Progress estimates that at least 2.6 million people across the United States are employed in industries particularly vulnerable to job loss as China, Canada, and the European Union respond to Trump’s tariffs with tariffs of their own. The Trump administration’s tariffs also have made it difficult to coordinate with the United States’ long-term partners and allies in responding to the threat posed by China’s predatory export practices. For example, under the Biden administration, the United States worked closely with Canada to build a strong North American auto market capable of protecting workers from the negative consequences of China’s efforts to flood markets with electric vehicles at falsely depressed prices. The Biden administration also worked with partners in Asia to build more resilient supply chains, recognizing the importance of collaboration when supply chains are so heavily integrated across borders. Now that collaboration is on hold, Canada is looking elsewhere for economic partnerships, and countries such as Japan and Korea are looking to work more closely with Beijing to support regional trade in Asia. Stock Market: Since Mr Trump’s victory share prices have had a turbulent time. At first investors cheered his return. But the stock market fell sharply after the announcement of “Liberation Day” tariffs on April 2nd, 2025. The partial reversal of those levies has since helped prices recover, to just above where they were on Election Day. Exchange rates: USD has depreciated sharply since March owing to fears about the impact of tariffs on economic growth. Mr Trump’s “Liberation Day” announcement on 2nd April, 2025 sent it down further still before it recovered slightly towards the end of the month. Since mid-May the dollar has continued to slide, partly due to rumours that Mr Trump could name, ahead of schedule, a new chair of the Federal Reserve who favours lower interest rates. Concerns about rising government debt have added to the pressure. Meanwhile, the euro has appreciated, helped by Europe’s pledge to raise defence spending. Bond Yields: The yield on ten-year Treasury bonds has fluctuated since Mr Trump’s election win. It rose after polling day but fell from mid-January as investors anticipated looser monetary policy. Yields then climbed sharply amid growing concerns over the president’s fiscal plans. They have since dipped slightly. Crypto Currencies: If one asset class was poised to outperform during the second Trump administration, it was crypto currencies. Mr Trump had pledged to make America “the Bit coin superpower of the world and the crypto capital of the planet”. In March, 2025 the White House established a strategic bit coin reserve. But there were few immediate signs of a boost. Bit coin prices fell after Mr Trump’s tariff announcements in April, 2025. Since then momentum has picked up. A trade truce with China on May 12th, 2025 sent bit coin to a record high. It remains above its level when Mr Trump took office. Inflation: Due to the impact of Mr Trump’s tariffs in June, 2025 annual inflation raised to 2.7%, from 2.4% in May, 2025, the fastest pace since February, 2025. With some firms now paying average import duties of around 10%, and higher levies likely to be on the way, inflation is likely to keep climbing in the months ahead. Consumer Sentiment: Consumer confidence has tanked since Mr Trump took office. Americans are bracing for higher prices as a result of his tariff war. They also worry about losing their jobs if their employers’ costs rise. Until recently such pessimism was mainly found in Democratic-leaning parts of the country; now the gloom is evident among Republicans too. GDP: GDP grew at an annualised rate of 3% in the second quarter, after shrinking by 0.5% in the first. The earlier decline reflected a surge in imports as firms rushed to beat Donald Trump’s tariffs. In theory, such imports should lift consumption and inventories, offsetting the drag on GDP. Though, there is a light increase in GDP, it is expected to fall in third quarter due to Mr. Trump’s economic and tariff policies. Labour Market: The unemployment rate fell in January, 2025 as hiring remained strong and wages rose. But since then job growth has slowed and the unemployment rate has slightly ticked up. Some sectors, such as manufacturing, have started cutting workers. In July, 2025 America added just 73,000 jobs. Hiring figures for May, 2025 and June, 2025 were also revised down by 2, 58,000, unemployment rate remains at 4.2%, that is to say, there is no improvement in employment opportunities. Highlights: • A persistent increase in import tariffs reduces real GDP growth. • The contraction is associated with a temporary reduction in the stock market value. • The federal deficit in percent of GDP increases. • Expansionary monetary policy can help mitigate the economic contraction. A persistent increase in tariffs on imports from the rest of the world reduces real GDP growth, permanently lowering real GDP relative to the trend before the tariff increase. The magnitudes are broadly consistent with available estimates of the negative impact of increases in average personal income tax rates. The contraction in economic activity is associated with a decrease in stock market capitalization. The federal deficit in percent of GDP worsens. Inflation increases. • A sharp increase in the average tariff on China from 15% to 40% starting early in 2025, isolated spats with other trade partners, but the avoidance of a global baseline tariff. • Extension of the Tax Cuts and Jobs Act in late 2025, with some additional measures, including reducing corporation tax from 21% to 20% (15% for some companies), higher defence spending, and modest spending cuts elsewhere so that fiscal policy is loosening by 0.5% of GDP in 2026. • A significant rise in deportations to 7, 50,000 a year, which, alongside border restrictions and deterrence, means net migration, falls from 3 million per annum to essentially flat. • Deregulation, including a relaxation of anti-trust measures and more lenient bank capital requirements. • US gross domestic product (GDP) growth to remain robust next year at 2%, reflecting a cooling, but still solid, labour market and strong corporate profitability. • 2026 forecast by 0.2% to 2.2% because there is expectation of fiscal loosening and deregulation to more than offset tariffs. However, this boost is likely to fade as the immigration changes take effect, and the level of real GDP could be lower than it would have been by the end of Trump’s term. • Higher tariffs, strong demand, and lower labour supply mean increased US inflation forecasts. Core personal consumption expenditures (PCE) inflation may be at around 0.2% and 0.4% higher in 2025 and 2026, respectively, leaving it stuck at around 2.5%. Therefore, we can expect the Federal Reserve (Fed) to deliver fewer rate cuts. We can forecast just three in 2025, with the Fed funds rate target range settling at 3.50%–3.75%. Additional rate reductions in 2027 and 2028 are possible as the economy eventually slows. Economic Transformation in the United States: Given all these policy and governing shifts, US business and financial investment may decline. Consumer confidence already has declined, and forecasts of a 2025 recession have grown more likely. Inflation expectations have diverged: model-based projections remain around 3%, but consumer expectations have surged above 7%. Since the beginning of the administration, due to tariffs – a form of taxes – Americans effectively have seen one of the most significant tax increases in more than a generation. Even factoring in the pause to certain tariffs (including for China), tariffs are up to an average of about 10%, from about 2.3% at the end of the Biden administration. Further, though marketed as a defence of middle-class jobs and manufacturing, tariffs are unlikely to yield the promised benefits in terms of employment and tax revenues. The outlook for science, immigration, and rural policy is equally troubling. In each case, the administration’s early moves suggest long-term costs to innovation, productivity, and community resilience. Fiscal policy adds yet another layer of stress. President Trump’s “Big Beautiful Bill” will further widen the US structural fiscal imbalance and unsustainable debt trajectory. According to “The Economist” as last updated on 23/09/2025. Donald Trump's 246 days term Inflation is at 2.9%. The unemployment rate is 4.3%. The S&P 500 is up 10.7% since he took office. Impact on Global Economy: Donald Trump seeks to destroy the world order and his ambition is to replace the international rule of law with the law of the jungle. He sees every interaction is an opportunity for one-sided bargaining to improve America’s relative position against all others. This is a dark vision of the future. Trump’s America First policies will accelerate the fragmentation of a tottering world order already beset by centrifugal forces—rising geopolitical competition, surging populist nationalism, stalled development, destabilizing technologies, and a deepening climate emergency. Instead to update multilateral institutions to address new threats Trump administration seems intent on delivering a coup de grace to existing bodies, without any positive vision of what comes next. Trump’s WHO executive order overlooks the broader risks of a fragmented system of global health security. In every lifetime, there are a few events that mark turning points in history, such as the fall of the Berlin Wall in November 1989, al-Qaeda’s attack on the World Trade Centre in September 2001 – and now Donald Trump’s return to the US presidency in January 2025. Trump’s words and actions are already creating tectonic shifts in geopolitics. Many of these changes are likely to endure: we should not expect the world to return to ‘normal’ after four years, because Trump and his followers represent a powerful current in American society. While addressing a joint session of the US Parliament, President Donald Trump announced that the United States will impose a reciprocal tariff on several countries, including India. He stated that Canada, Mexico, India, and South Korea impose high tariffs on American goods, and in response, the US will implement similar tariffs on these countries starting from 2nd April, 2025. Higher tariffs can increase the cost of imported goods, leading to inflation. Additionally, if both countries keep raising tariffs on each other’s products, it can damage trade relations and hurt economic growth. Over time, this can reduce the overall volume of trade between nations, impacting businesses and consumers alike. A federal appeals court in US has ruled that most of President Trump's global tariffs were illegal. The ruling explains the president exceeded his authority in using emergency powers to impose them. Though, Federal Court has granted time to appeal to the Supreme Court, it is a setback to Mr. Trump. On February 4, 2025, President Donald Trump signed a sweeping executive order with the potential to upend decades of American global engagement. The directive mandates a comprehensive review within 180 days of all current multilateral organizations of which the United States is a member and all international treaties to which it is party. The explicit purpose of this exercise is to determine whether such support should be withdrawn. The order declares that the United States will withdraw from the UN Human Rights Council, as it did during Trump’s first term; reconsider membership in UNESCO, a long-standing target of Republicans; and cease all funding for the UN relief agency for Palestinian refugees. The Trump administration has already pulled out of the Paris Climate Agreement, announced its intent to withdraw from the World Health Organization (WHO), and effectively renounced UNHCR (United Nations High Commission for Refugees) U.S. legal commitments under the 1951 Refugee Convention. The president also plans to dismantle international trade rules in favour of reciprocal bilateral tariffs, signalling the death knell of the ailing World Trade Organization. This is only the beginning. Countless other international treaties and organizations could be on the chopping block. It is even plausible that the Trump administration will conclude that an “America First” foreign policy requires pulling the United States out of the UN—and kicking the UN out of the United States. The White House could take similar steps to withdraw from international financial institutions—particularly the World Bank as explicitly recommended by Project 2025—and ejects them from Washington. Among legal scholars, there is considerable debate and ambiguity over whether the president actually possesses the constitutional authority to leave the UN (which has no formal withdrawal provisions), much less to unilaterally abrogate thousands of treaties (particularly in the absence of a specific termination clause in the relevant instruments of ratification). The Trump administration’s decision to withhold $2.2 billion in grants and $60 million in contracts from Harvard University, announced on April 14, 2025, marks a significant escalation in federal oversight of elite academic institutions (Economic Times, 2025). The freeze stems from Harvard’s refusal to meet demands to limit campus activism, including implementing “merit-based” admissions, auditing diversity views, banning face masks at protests, and withdrawing recognition from certain student groups. Similar measures have targeted six other universities – Columbia, the University of Pennsylvania, Brown, Princeton, Cornell, and North-western – signalling a broader policy to leverage federal funding to influence campus governance (Economic Times, 2025). J.P. Morgan Global Research brings you the latest updates and analysis of President Trump’s tariff proposals and their economic impact. • August 1: The effective US tariff rate now stands at 15.8% • August 1: Tariffs on South Korea leave Q3 GDP growth forecast unchanged at 2% • July 31: US tariff rates move toward 20% • July 27: The US and EU agree on a trade deal • July 24: US–Japan trade deal could be supportive of Japanese stocks and the yen • July 14: The total effective tariff rate could now be close to 17% • July 14: A surprise 30% tariff for the EU? • July 9: President Trump imposes 50% tariffs on Brazil • July 8: Tariffs deadline pushed to August 1 • July 8: Copper prices surge after President Trump imposes 50% tariffs • July 2: The US and Vietnam agree on a trade deal • June 18: 50% aluminium tariffs are paralyzing the MWP market • June 3: The average effective tariff rate should eventually settle around 15-18% • May 13: The US and China announce a 90-day reprieve • May 8: The US and the UK agree to a trade framework List of Some Countries Which Have Been Impacted by US Tariffs: (With effect from 7/08/2025). Serial Number Country Share of Imports (%) Rate (%) 1. Mexico 15.5 25 2. China 13.4 30 3. Canada 12.6 35 4. Germany 4.9 15 5. Japan 4.5 15 6. Vietnam 4.2 20 7. South Korea 4.0 15 8. Taiwan 3.6 20 9. Ireland 3.2 15 10. India 2.7 50 11. Italy 2.3 15 12. United Kingdom 2.1 10 13. Switzerland 1.9 39 14. France 1.8 15 15. Malaysia 1.6 19 16. Singapore 1.3 10 17. Brazil 1.3 50 18. Australia <1 10 19. Pakistan <1 10 20. Bangladesh <1 20 Source: White House. Imports data from US Census Bureau (2024) Updated 06 Aug 2025 Analysis: Brazil faces one of the highest US tariff rates in the world, with a 50% rate applied to most goods. India is also set to be hit with a 50% rate, effective from 27 August. Negotiations are still under way, with both Washington and Beijing. Mexico also got a reprieve as Trump said it would be charged at current rates for another 90 days, avoiding a threatened increase to 35%. Canada already faces a 35% tariff. Most goods are exempt under the US-Mexico-Canada trade agreement. Trump has Damaged the Liberal International Order: The US and its allies have not always lived up to these ideals: the long-lasting and unsuccessful US-led wars in Afghanistan and Iraq undermined their authority, as did the 2008-09 financial crises. But Trump is the first US president to openly share Vladimir Putin’s contempt for the principles of the rules-based order. Trump’s belief in spheres of influence, veering towards old-fashioned 19th century imperialism, makes it natural for him to seek territorial expansion into Canada, Greenland and parts of Central America. Putin and Xi observe that and smile, seeing that the US is now much less likely to oppose their own schemes for territorial aggrandisement. Trump seems utterly indifferent to international law and organisations (including those effectively run by the US, such as NATO), to alliances with key European and Asian partners, and to whether a country respects democratic norms and human rights. Countries with little or no respect for the Western-led order, such as China, India and Russia, have been rising. India and China accept some role for multilateral institutions. Trump has Weakened America, Economically and Politically: His policies are creating serious problems for the US economy. For example, both tariffs and mass deportations of irregular migrants who take the jobs that Americans will not do are stoking inflation. The frequent chopping and changing of policy creates uncertainty, harms investment and has a negative impact on market sentiment. The defunding of large areas of scientific research risks undermining the innovation that has given the US a consistently higher growth rate than Europe; America is giving up the leadership of many green technologies to China. Furthermore, a country that expels visitors, confiscates their electronic devices for criticising the president and detains international students engaging in protest will be less attractive for international business and academic exchanges. The world can also see how Trump is eroding the checks and balances of the US political system, through his attacks on the federal government, his criticism of the courts (and his non-compliance with some of their decisions), his harassing of political opponents and his side-lining of Congress. The decisions to virtually abolish institutions like USAID (United States Agency for International Development) and Voice of America have done a lot to undermine US soft power – and American global influence. A nationalist and unpredictable America is less attractive as an ally and as a trading partner. The damage Trump is doing will be hard to repair. Frequent go on changing the Policies will lose credibility towards US in the international arena. The US’s Reputation in Developed and in Developing Countries has taken A Severe hit: In many European, Asian and other democratic countries – like Canada, Australia and India – generations of politicians, officials and businesspeople have grown up wedded to the idea of American global leadership. For many of them, the US security umbrella has been crucial. But Trump’s words make many US allies, and especially those that feel threatened by Russia or China, insecure. Leaders in these countries worry that America may not stand by its commitment to their defence. Some of them, for example Poland and South Korea, are seriously considering whether they should build their own nuclear weapons, given the uncertainty over whether they can count on the protection of America’s nuclear deterrent. A lot of allies wonder what happened to the democratic values that American leaders have preached for generations; Trump and his close advisers seldom talk of them – and some are overtly hostile. However, huge numbers of people living in developing countries, whose living standards and health have benefited from US-funded NGOs, are paying a terrible price for Trump’s second presidency. China Is a Big Winner: The Chinese have been trying for years to prise the Europeans away from the Americans, and now Trump has done much of their work for them. Chinese leaders have wanted to see the emergence of a multipolar world and now there is a chance that Europe will become some sort of self-standing pole. Like Putin and Trump, the Chinese believe in spheres of influence, and they will see that a Trumpian US is unlikely to stand in their way, should they choose to take over Taiwan. There are also questions about how much the US would support other allies in China’s neighbourhood, such as Japan, South Korea or the Philippines – and that may encourage Beijing to be more high-handed in its dealings with them. Of course, the Chinese could lose from the trade war that Trump has started against them. But, in any case they can always hope for a deal with Trump on tariffs. Ukraine Faces A Much More Ominous Future: Trump’s attempts to broker a ceasefire, are unclear. He says NATO countries should shot down the flights which violates Ukraine air space. US enters only if circumstances warrants. The Palestinians And Israel Will Both Be Worse Off: For the Palestinians, Trump is very bad news. He has never displayed much sympathy for their plight, or seemed bothered by their lack of a state. Since returning to office Trump has aligned the US with Benjamin Netanyahu’s far-right Israeli government, which strongly opposes any kind of Palestinian State. He has also suggested removing the Palestinians from the Gaza strip, so that it can be rebuilt. He has given Palestinians no reason to believe that diplomacy and negotiation can improve their condition. But, Trump is also bad for Israel too. American military, diplomatic and economic support for Netanyahu encourages him to keep working with his extreme-right coalition partners. The Netanyahu government thinks it can get away with its policy of zero rights for Palestinians, and semi-constant war against them. This is not in Israel’s interests: in the long run it will face a much harder form of international isolation than it does today – and there will be continued tensions with its Arab neighbours. Furthermore, future generations of Palestinians will be radicalised and turned towards violence. Israel’s armed forces cannot on their own secure a long-lasting peace. Buy American: Joe Biden continued the protectionist policies of Trump’s first administration and added some of his own, such as ‘Buy American’ provisions. With Trump’s second administration dramatically escalating this trend, it now seems highly unlikely that the US will ever again accept the authority of the WTO. It is up to Europeans and like-minded countries to salvage what they can of the rules-based trading system. Economic Consequences of Trump Policies: The economic consequences of Trump imposing punitive tariffs on the likes of Canada, Mexico, the EU, the UK, India and China will be considerable. Most of those countries are hitting back with their own tariffs. Tariffs push up inflation. Trade wars inevitably reduce trade and thus curb economic growth, while the uncertainty over further trade-hindering measures is dampening confidence. Furthermore, the US’s own economic problems, already referred to, will be a drag on the global economy. Elsewhere around the globe, China remains the primary interest of President Trump’s trade policies, and one of the few countries to respond with substantial retaliatory tariffs. China is highly competitive in many high-tech sectors and has real economic leverage, as recently demonstrated by China’s restrictions on exports of rare earth minerals and magnets. It faces, however, mounting structural stresses: high debt, surging youth unemployment, and a fragile real estate sector. Mitigating US tariff shocks would require China to shift toward consumption-led growth. As daunting as US-Canada relations have been, they may have led to a shift in Canada’s political landscape: the Liberal Party gained greater traction under its new leader, Mark Carney. In Japan, it may provide impetus to enact long-overdue agricultural reforms. Latin America, due to its geographic and economic proximity to the US, is especially exposed to Washington’s trade agenda. Mexico is particularly vulnerable. As the top US trading partner and a linchpin of the North American auto industry, it holds the second-largest bilateral trade surplus with the US. Any tightening of trade conditions is likely to dampen Mexico’s growth. Beyond trade, deep cuts to foreign aid threaten far-reaching consequences in low-income economies. Proposed reductions in assistance could result in more than 500,000 additional deaths each year, primarily due to increased mortality from diseases like HIV and malaria. 88 Countries Suspend Postal Service with the US: Customs duties hit e-commerce and small shipments for manufacturing and retail. Money Problems to United Nations due to Trump’s Threat to Withdraw Funds for UN: United States played a pivotal role in the creation of the United Nations 80 years ago, and has long wielded immense power there, helping sway elections and votes on human rights and in other arenas. The United States has always been the U.N.’s largest financial contributor. But since taking office, Trump has upended its operations by withdrawing from the Human Rights Council and other agencies, and freezing funding for others. The U.N. has long had money issues, and the Trump administration’s retreat has made its cash crunch worse. As a result, U.N. leaders are looking to save money everywhere: by relocating positions to cities less expensive than New York or Geneva, ending some leases early, and even potentially cutting rations to peacekeeping troops. U.S. President Donald Trump signs order offering some tariff exemptions to countries with U.S. trade deals: U.S. President’s latest order identifies more than 45 categories for zero import tariffs from “aligned partners” who clinch framework pacts to cut his “reciprocal” tariffs and duties. The zero-tariff items identified in the order include graphite and various forms of nickel, a key ingredient in stainless steel manufacturing and electric vehicle batteries, compounds used in generic pharmaceuticals, including the anesthetic lidocaine and reagents used in medical diagnostic tests. The order encompasses various types of gold imports, from powders and leaf to bullion, a key import from Switzerland, which is struggling with U.S. tariffs of 39% as it has not yet reached a trade deal. The order also permits tariffs to be scrapped on natural graphite, neodymium magnets, light-emitting diodes (LEDs) and eliminates previous tariff exemptions on certain plastics and polysilicon, a key component of solar panels. America’s reputation drops across the world: The proportion saying the United States will have a positive influence on world affairs has fallen in 26 out of 29 countries over the last six months. America’s reputation has fallen most markedly in Canada. For the first time, China is placed ahead of the US when it comes to playing a positive role on the international scene. Trump Imposes ₹88 Lakh Annual Fee on H-1B Visa: End of the US Dream for Indians? US President Donald Trump has raised the annual fee for the H-1B visa—a major gateway for professionals entering the US—to $1 lakh (about ₹88 lakh). Trump’s decision will hit US tech firms the hardest, as they rely heavily on Indian talent. Under the new rules effective from September 21, companies must pay an annual $1 lakh fee in addition to employee salaries. Due to this many young talented foreign students could lose chance to visit US on H-1B Visas. The government also believes this policy could face legal challenges, since it impacts both foreign employees and American companies alike. Tech industry in shock after Trump’s move and many software companies like Micro Soft and Google requested their employees who are outside US should return to US within 24 hours. It created confusion and havoc among tech companies and H-1B visa holders. Many Airways Companies took advantage of this situation and cashed it. The H-1B visa is critical for US companies to hire skilled workers from India, China, and other countries. But, late USA gave a clarification that 1Lakh USD will be charged for H-1B Visas for freshers only for one time at the time of entry into US and not for every year. It is further clarified that this fee is not meant for the existing H-1B Visa holders in US and not also for renewals. Trump justified for several restrictions imposed on foreign nationals to attract the highly skilled people in to USA. Alongside the H-1B fee hike, Trump has also introduced new visa programs: Gold Card Visa: Offers US citizenship for a $1 million (₹8.8 billion/₹15,000 crore) investment. Applicants must also pay a $15,000 verification fee. Fast-Track Company Visa: Companies can secure quicker visas for sponsored workers by paying $200,000 (₹1.76 crore). Platinum Card Scheme: Costs $500,000 (₹4.4 crore) and allows holders to stay in the US for up to 270 days a year. Income earned during this period will be tax-free. Why China may finally be giving up TikTok? TikTok had agreed to sell its American operations. During his first term, Trump was negotiating for TikTok in the U.S. But China refused to give American investors control of the platform and its powerful recommendation algorithm. In recent months, however, the two countries have been in negotiations and have seemed to find common ground. China wants relief from tariffs. It wants Trump to loosen export controls on advanced chips and to cut back support of Taiwan. It also wants an in-person meeting between Trump and President Xi Jinping, ideally in China, where they can control the optics (The word “optics” is used in North American English typically in a political context). Special Reference to India: Why Trump is against India? 1. Not Supporting Trump for Noble Prize for Pease: Donald trump announced that he stopped the India and Pakistan war after Pahalgam attack. Pakistan nominated him for Nobel peace prize, so Donald trump wanted, India to do same. Prime Minister Narendra Modi sharply rejected saying Trump’s steps were not related to a ceasefire. 2- India Buys the Russian Oil. India has been buying the Russian Oil since last two years. According to the some estimate, India bought till now, 270 Billion of oil each Year. In the perspective of present world view and Russian –Ukrainian war, when the western world had imposed total sanctions on Russian Products, according to Trump India is helping to sustain the Russian economy. Ignoring China, who is buying more oil from Russia than India and imposing more punitive tariffs on India i.e., 50% and on China imposing only 30%. 3. India rejected the purchase of F-35 from USA, because of its high price and also due to high punitive tariffs on India. 4. India an active member of BRICS. Trump thinks that BRICS is working grossly against the interest of the USA and Western Powers. He thinks that BRICS is working to culminate the dominance of Dollar and shaping the emergence of their own currency. 5. Despite of Multiple Trade Talks India - US Trade Agreement is stuck on One Point - Opening of Indian market for USA Agricultural Products. Trump is purely transactional person and he wants to dump USA agricultural produces in Indian market. But, Modi rejected the Trump’s proposal, saying that “Bharat will never compromise on the interests of its farmers”. Trump Imposes ₹88 Lakh Annual Fee on H-1B Visa: End of the US Dream for Indians? US President Donald Trump has raised the annual fee for the H-1B visa—a major gateway for professionals entering the US—to $1 lakh (about ₹88 lakh). Trump’s decision will hit US tech firms the hardest, as they rely heavily on Indian talent. Under the new rules effective from September 21, companies must pay an annual $1 lakh fee in addition to employee salaries. Experts say this could be devastating for firms, especially since Indian professionals are the largest beneficiaries of H-1B visas. Government data shows that 71% of all H-1B visas issued last year went to Indians. Due to this many young talented Indian students could lose chance to visit US on H-1B Visas. But, it could also create new opportunities for US tech companies in India. Many companies may now expand Global Capability Centers (GCCs) in India to overcome the shortage of skilled workers. The government also believes this policy could face legal challenges, since it impacts both foreign employees and American companies alike. The H-1B visa is critical for US companies to hire skilled workers from India, China, and other countries. US President Donald Trump's 50% tariff on India has officially come into effect, targeting nearly $87 billion of exports over New Delhi's purchase of Russian oil. Key sectors such as textiles, apparel, leather, handicrafts, gems, jewellery, agriculture, seafood, machinery, and furniture face higher US duties, while 30% of exports, including pharmaceuticals, electronics, IT, and petroleum, are expected to remain duty-free. Experts warn of potential GDP slowdown and job risks, but India is proactively mitigating the impact through tax relief, self-reliance initiatives, and reportedly encouraging market diversification to Latin America, Africa, and West Asia. Watch to know more. India is pushing back hard against U.S. pressure, ramping up Russian oil imports and calling out Western hypocrisy. With nearly 300,000 extra barrels a day planned, Russian crude now fuels 40% of India’s energy needs. As Washington accuses New Delhi of profiteering, Indian leaders and analysts argue that energy security trumps politics — especially when the West continues its own trade with Russia. But the real counter-punch is unfolding on the ground. From universities to spiritual leaders, citizens are rallying to boycott American brands like Coca-Cola, McDonald’s, and Apple. Yoga guru Ramdev calls it “economic resistance,” while entrepreneurs urge support for local start-ups. Yet, with U.S. companies deeply embedded in Indian life — from WhatsApp to Domino’s — the boycott’s impact remains uncertain. Is this the dawn of a new economic freedom movement? From textile factories to shrimp peeling units, hundreds of thousands of workers could lose jobs. On 27/08/2025 morning, India woke up to 50 percent tariffs imposed on its goods sold to the US, after the Trump administration followed through on its threat of doubling levies from 25 percent over India’s purchase of Russian oil. The White House says Prime Minister Narendra Modi’s government, among the top buyers of crude from Russia, is financing Moscow’s war in Ukraine. Indian officials have accused Washington of double standards, pointing towards how the European Union and China buy more from Russia and how Washington, too, still trades with Moscow. Clothes: Up to 40 per percent of business in the US market are affected. Five rounds of talks have failed to yield a trade deal between Washington and New Delhi, and exporters now fear their customers might give up on India altogether. “If these tensions prolong, then buyers would look for alternative markets for sourcing. Analysts and economic observers say the tariffs could devastate key export-driven sectors of the Indian economy, with hundreds of thousands of jobs at risk. Sea Food: Last year, India exported an all-time high of 1.78 million metric tonnes of seafood worth $7.38bn. Shrimp dominates, contributing 92 percent of the total value. And the US takes in more than 40 percent of India’s shrimp shipments. “The shrimp industry is a very highly labour-intensive sector, with small farmers,” nearly two million people are associated with shrimp exports. More than 50 percent of those workers will bear the direct brunt of Trump’s tariffs. “The small farmers, who peel the shrimp, will be worst affected because there is no work now to employ them.” Exporter associations estimate that the tariffs could affect nearly 55 percent of India’s $87bn worth of merchandise exports to the US – and benefit competitors such as Vietnam, Bangladesh and China, which have been tariffed at lower rates. Indian Students Suffered: Due to Trump administration’s decision to withhold $2.2 billion in grants and $60 million in contracts from Harvard University, announced on April 14, 2025, Indian students, numbering over 330,000 in the U.S and surpassing China as the largest international student group, is particularly affected by these developments (Institute of International Education, 2024). At Harvard and other targeted institutions, Indian students excel in STEM, business, and public policy, relying on university resources for financial aid, research, and visa support are largely affected. Travellers to US Reduced: According to the statistics released from the office of the US Commercial National Travel Tourism in June, 2025 only 2.1 Lakh Indians visited US. In the same period i.e., in June, 2024, it was 2.3 Lakhs. The same trend was continued in July, 2025 also. This indicates Indians are losing in interest in visiting USA. It is also observed that this year the number of Indian students visiting to US for higher is also decreased. Moody’s Ratings: It has noted that Trump’s tariffs on Indian imports could slow India’s economic growth. Beyond 2025, the ratings agency said, the much wider tariff gap compared with other Asia Pacific countries would severely curtail India’s ambitions to develop its manufacturing sector and may even reverse some of the gains made in recent years in attracting related investments. Garment Export Industry: Tiruppur contributes nearly a third of the total $16bn ready-to-wear garment exports. Tiruppur’s earnings in US dollars have earned it the name of ‘Dollar City’. The world’s top fashion brands, including Zara and Gap, source clothes from here. But while higher margins in the case of big brands give some businesses temporary breathing space, a prolonged crisis could cripple them, said V Elangovan, managing director of SNQS International Group, which exports garments. “Wherever margins are lower, the production has been halted altogether,” he said. Elangovan’s company employs 1,500 people. He said about 150,000 workers stand to lose their jobs due to Trump’s tariffs in Tiruppur. India “should become self-reliant … Economic selfishness is on the rise globally and we mustn’t sit and cry about our difficulties,” Modi said in his Independence Day speech on August 15 from the ramparts of New Delhi’s Red Fort.“Modi will stand like a wall against any policy that threatens their interests. India will never compromise when it comes to protecting the interests of our farmers,” the prime minister had said, referring indirectly to sticking points in trade negotiations with the US, which wants greater market access to India’s agriculture and dairy sectors. Almost half of India’s 1.4 billion people depend on agriculture for their livelihood. But traders fear that they could be left bleeding in the bargain. “The government is letting us get punched in one eye to save the other eye,” said Elangovan. “A 50 percent tariff is practically an embargo on Indian goods.” America’s tariff attack has created an opportunity for India to clarify its strategic priorities. Prime Minister Mr. Modi and noted Indian economist - former RBI Governor Mr. Raghu Ram Rajan said “India should not depend on other countries and become self reliant in every field”. India must develop its own social media like US and China, so that it can have control over it and can save lot of money. The country’s optimal response to US protectionism is not to retaliate or retreat, but to seek and cultivate other partners that remain committed to rules-based international trade. By deepening trade and investment ties with the UK, the EU, Japan, and Australia, India can recalibrate its economic relationships and reaffirm its commitment to the globalized economy that has served it so well. Trump doesn’t want to spend US’s money on NATO at the cost of US tax payers. He wants them to be self reliant to protect their own countries. That’s why he undermined U.S. commitment to NATO. But, one thing is very clear that frequently changing policies will tarnishes the age old image and credibility of US in the international arena. Ultimately, positive news is coming from USA during recent trade talks between US and India that US may lift 25% of additional tariffs after 30/11/2025. Future Out-Look: The United States will face significant foreign policy challenges in the next decade. American leaders will need to contend with humanitarian crisis and conflict exacerbated by climate change; adversaries that seek to expand influence and exert power; autocrats that threaten democracy from within and without; and new technologies such as artificial intelligence that exacerbate the magnitude of existing threats while also creating new ones. Each of these challenges threatens the security, prosperity, and well-being of billions around the world—and millions of Americans at home. Future American leaders will contend with these challenges in a new era of global leadership. The post-Cold War period of U.S. hegemony is over: While the United States remains the world’s largest military and economic power, China and India rise, the influence of global power such as Russia, and the divergent interests of rising economies such as the BRICS constrain Washington’s ability to unilaterally set the terms of the world order. The Trump administration’s hyper nationalistic approach to foreign policy fundamentally weakens U.S. global leadership at a time when partnerships and alliances are critical to meeting these challenges. One thing is clear that till most of the countries in the world use USD for their trade, US can play a pivotal role in the world politics. The moment, if most of countries stop using USD for their world trade and switch on to other currency in future US dominance in the global market will diminish. Hence, US should be very careful regarding imposing higher tariffs against prominent counties. We cannot rule out farming of BRICS currency in future like EURO, if US go on imposing higher tariffs. Conclusion: President Donald Trump’s approach to foreign policy has rapidly reshaped global order, dismantling the foundations of U.S. leadership in the world. President Trump has pushed away—or deliberately threatened—American allies and trade partners, leaving the United States more isolated on the world stage. Since his inauguration on January 20, 2025, Trump has engaged in trade wars that have raised consumer costs, tanked markets, and jeopardized economic partnerships; undermined U.S. commitment to NATO, creating ruptures with transatlantic allies; dismantled U.S. foreign assistance programs that exemplify U.S. leadership and generate global stability; and pulled the United States out of global compacts on climate, health, and human rights that make the world a safer place for all. While this acts undoubtedly affect millions all over the world. The overall economic picture is troubling. Economic consequences of the Trump Administration, a preliminary assessment are likely to weigh negatively on both the US and global economy in the short and long term. Trump must take in to consideration regarding mutual confidence and cooperation before imposing tariffs on other counties to protect mutual interests of trade. US being the oldest and India being the largest democratic countries in the world, it is very much essential to work together for their mutual benefit. References: 1. Key findings about U.S. immigrants - Pew Research Center 2. Peterson Institute for International Economics – A US Think Tank Estimations 3. The economic consequences of the second Trump administration – Cepr.org 4. Trump Tariffs: Tracking the Economic Impact of the Trump Trade War – Wita.org 5. 100 Days of the Trump Administration’s Foreign Policy: Global Chaos, American Weakness, and Human Suffering – CAP (Center for American Progress) 6. US Tariffs: What's the Impact? J.P. Morgan Global Research 7. How do tariffs impact the US economy? - ScienceDirect.com 8. Global Economic Outlook: July 2025 S&P Global 9. White House - Imports data from US Census Bureau (2024) Updated 06 Aug 2025 10. America’s reputation drops across the world – IPSOS 11. Donald Trump's return to office: Ten Consequences - Cer.eu 12. U.S. President Donald Trump signs order offering some tariff exemptions to countries with U.S. trade deals - The Hindu Updated on September 06, 2025 02:29 pm IST 13. TikTok standoff seems to be over - New York Times - email dated: 22/09/2025 14. Money Problems – UN - New York Times - email dated: 23/09/2025 15. The US economy under Donald Trump - The Economist (Last up dated on 23/09/2025)