Trump's Confrontational stance, A recipe for disaster or a path to success?

President of the United Sates, Donald Trump, announced a 90 - day pause on reciprocal tariffs that hit dozens of partners within the last week, with the exception of China, where he plans to raise tariffs to 125% with immediate effect in response to an 84% toll on American goods to China. This comes, despite the massive pressure from many business leaders and investors encouraging Trump to reverse policy.

Mr Trump's intention to unleash the biggest disruption to trade in modern history has also caused major turmoil in the markets, with s&p 500 experiencing loss of $5.8 trillion market value. Today, following the announcment of the Tariff pause, Euphoria sored, and the NASDAQ 100 surged 12%, with the s&p bouncing back 9.1% and achieving new all time highs. This volatile market has led to the equity benchmark for US securities climbing 9.5%, the most since the global financial crisis. The recent events are worrying many investors, who are faced with constant uncertainty. Ryan Nauman, a market strategist at Zephyr, states that the recent bounce is a "relief rally, buying the dip". This rollercoaster-ride that is transpiring across the market as a result of Trump's Tariff war has not only shook up investors, but also America's Tech giants.

Amazon, Google, Microsoft and Meta, four of the worlds largest tech giants born in America were planning to spend roughly $300bn in total on AI cloud computing technology, which had assisted the AI stockmarket boom. Following the Tariffs dealt by Trump, this may slowdown some of the expected investments as costs of data-centers alongside components like cooling gear and networking equipment are likley to rise in the forseable future which has contributed to fears of a slowdown. Apple has been hit with the possibility of an increase in costs of Iphones in America due to the Tariffs, and Trump's administration has not yet come up with a solution to any of these worries. Trump is clear on his priorities, it seems his bullish approach to reshaping US trade relations is at the top.

On April 2, Trump imposed new “reciprocal” tariffs, including a 27% duty on Indian goods. India has tried to appease Trump by reducing Tariff's on goods like Motorbikes and Bourbon in addition to increasing it's expenditure on American exports such as oil and gas, as India is planning to sacrifice short term prosperity in hopes to land a trade deal with the US in the future to foster more economic growth. A target for bilateral goods and services trade to increase to $500 bn (up from roughly $210bn in 2024) is what was discussed in a meeting at Washington between the two countries leaders back in Febuary. This seems to have opened up the possibility for more significant talks regarding trade in the future as the two sides had reached "an understanding of the next steps". It seems that India wants to get on good terms with Mr Trump. It would also be wise to do so, as the new tariff's direct impact on India's economy is limited. If anything, some suggest that Trump’s tariffs may be playing to India’s advantage, particularly as sectors such as pharmaceuticals are exempt, potentially giving India a competitive edge in what appears to be a losing battle for many other countries. Sectors such as Agriculture, however, will come under strain as America is still India's largest export market.

Whether Trump's erratic tariff policy will benefit America or not, what is certain is that the functionality of international trade will be severely disrupted in the coming months, or even years if President Trump continues down this path. It is too early to draw conclusive arguments of who is a "winner" and a "looser" as of now, but rest assured that the tariff king just seems to be getting started.