Trade Fights, Tariffs & Trouble: Why It Matters To You and Me
Issue #12 What the US trade fight means for India, your money, and the global economy
Lately, there’s been a lot of talk about trade wars, tariffs, and rising tensions between countries like the US and China. It can feel confusing, technical, or even boring.
But here’s the thing: these global moves affect all of us—our business, the price of things we buy, and even the money we invest.
Trade = Everyone Does What They’re Best At
Let’s start with a simple example.
West Bengal makes amazing Rosgullas. Bikaner makes top-quality Bhujia. If each state focuses on what they do best, and they trade, everyone benefits.
But if Kolkata puts a tax on Bhujia to protect local sellers, prices go up. People stop buying. And suddenly, Kolkata tries to make its own Bhujia—which isn’t as good.
This is what tariffs (extra taxes on imports) do in global trade. They break the system of specialization—where each country focuses on what it does best.
When Business Gets Scared
If you don’t know what tomorrow’s prices will be or if your goods will be taxed—will you invest in your business? Probably not.
This is how uncertainty works. Businesses stop making bold moves. They pause. This slows the whole economy.
Physical Goods vs Digital Products
Lets use a simple 2x2 box to understand trade:
Some goods are physical (like shoes or machines)
Some are digital (like Netflix or Google Ads)
Some countries allow free trade
Others add tariffs
For many years, the US allowed free trade. This helped companies lower costs, invest in research, and create great products.
But here’s the twist: the US sells a lot of digital stuff—like Apple, Google, Amazon services. These often go untaxed in many countries.
Now, some governments are thinking: “Maybe we should tax these digital services per user.”
China Hits Back Fast
When the US added tariffs, China responded quickly. This scared the markets.
Why so fast? Because China has a history of being closed off—and they’ve survived it. But for America, closing borders is new and risky. Their companies depend on global trade.
Will Tariffs Bring Jobs Back to the US?
In 2018, Trump added tariffs on washing machines.
What happened?
Prices went up.
Only a few jobs were created.
The cost per job was very high.
Even dryers (which weren’t taxed) got more expensive.
Companies just passed the cost to consumers.
So, tariffs don’t always bring jobs back. They often just make things costlier for regular people.
The Middle Class is Struggling
In the US, companies are growing, but salaries are not. The middle class is shrinking.
That means people are spending less. And when people don’t spend, businesses suffer.
In China, the middle class is still growing, which makes them stronger in these tough times.
What About India?
Many people say, “India has a big domestic market. We’ll be okay.”
I disagree.
Here’s how global trade fights can hurt India:
Exports slow down when US/Europe is in recession. Just ask Indian textile exporters in Tirupur or diamond traders in Surat.
Foreign investment dries up—FII outflows impact Sensex/Nifty.
Commodity prices fall—hurting Indian companies in steel, cement, oil.
IT revenues drop—when US companies cut tech budgets, TCS, Infosys feel it.
So no, India is not safe from global trouble.
What Should Investors Do?
“Heads I win, tails I survive.”
That means:
Don’t try to guess the market.
Don’t invest too much or too little.
Just stay balanced and protect yourself from big losses.
A Chance to Grow in Uncertain Times
There’s also opportunity in chaos.
When others freeze, smart companies can:
Lower prices,
Win more customers,
Grow market share (even with less profit for now).
Think of it like this:
Market share is land. Profit is the crop.
First, grab the land.
Could the World Move Away from the US?
What if countries stop trusting the US?
Could China, India, Russia, and Europe make their own trade systems?
Could they stop using the US dollar?
Could new global alliances form?
Maybe. History shows us that when trust breaks, new systems rise.
Are we building more walls or more bridges in this new world?
Trade wars and tariffs are not just about politics.
They affect prices, businesses, jobs—and even how countries work together.
The world is changing fast. But if we:
Stay aware,
Stay cautious,
And move smartly…
We can survive the storm—and maybe even grow through it.
What do you think?
Until next time,
Priyank Agarwal
Stay curious. Stay safe.