Zerodha CEO questions Trump's tariff policy, warns of potential backlash
What's the story
Zerodha's CEO Nithin Kamath has voiced skepticism over the efficacy of US President Donald Trump's "America First" trade policies. In a post on social media platform X, the billionaire said these tariffs could isolate the US internationally and inadvertently strengthen China's global trade dominance. Kamath's comments come after Trump recently announced a 25% tariff on imports from Canada and Mexico, and 10% on goods from China.
Trade concerns
Policies could weaken global influence of the US
Kamath warned that Trump's aggressive tariff policies could potentially weaken the US's global influence. He said, "The way Donald Trump has gone about imposing tariffs and making statements about other countries makes it feel like we are all subjects of the 'US empire,' if it wasn't evident till now." This highlights his concern about the potential backlash these policies might provoke from other nations.
Economic shift
China's growing trade dominance
Kamath also emphasized the growing gap between trade and financial power. He said, "In terms of trade, China today is the largest trading partner for over 120 countries. In terms of financial and military dominance, the US remains the most powerful nation, for now." This was further illustrated by an infographic from the Lowy Institute, which depicted China overtaking the US as a top trade partner for several countries.
Global impact
Kamath questions the logic of increasing tariffs
Questioning the logic of raising tariffs in a deeply interconnected global economy, Kamath asked, "In such a globalized and interconnected world, how can you increase tariffs, which will inflict collateral damage, and still hold on to power?" His comments reflect fears of how these policies could negatively affect international trade relations.
Retaliation response
Market reaction and potential retaliation to Trump's tariffs
Trump's latest trade war rhetoric has already affected financial markets in India, Asia, as well as the US. Investors are bracing for retaliation from Canada, Mexico, and China. In fact, Canada is reportedly mulling tariffs on US imports while China has vowed to protect its trade interests. This development hints at a possible global pushback against the new US tariffs.
Twitter Post
Take a look at Kamath's post
The way Donald Trump has gone about imposing tariffs and making statements about other countries makes it feel like we are all subjects of the "US empire," if it wasn't evident till now.
— Nithin Kamath (@Nithin0dha) February 3, 2025
In terms of trade, China today is the largest trading partner for over 120 countries. In… pic.twitter.com/e6cJF9EdBP