India United States trade and American tariffs or Indian Tarriff as two opposing cargo ships as an economic taxation dispute over import and exports concept as a 3D illustration.
It is beyond a shadow of a doubt that 50 percent tariffs the administration led by US President Donald Trump has slapped on Indian exports are going to hit Indian economy in numerous ways with shutting down of many enterprises and its cascading impacts on loss of employment for many people especially employed in garments, gems and jewellery, furniture, chemicals, footwear and fishing industries. However, the US under second Trump administration has raised the tariff war with many countries without any sound economic rationale whereas it represents desperate moves by an administration plagued by economic chaos at home. The administration is pursuing a form of state capitalism by exercising control over the key financial institutions through fund cuts and firing key officials of the institutions by accusing them of indulgence in fraud practices and distortion of statistics indicating health of the economy. While these key institutions are serving in the interest of the country, they had to confront President Trump’s wrath primarily because they preferred to call spade a spade when US economy is falling far short of expectations. President Trump’s high-handed actions point to his desperations to hide the financial predicaments such as trillion dollars of debts from which the US domestic economy is reeling under paving way for financial instability, steadily rising unemployment and inflation. On July 31, 2025, the federal debt exceeded $36.91 trillion, with annual interest payments surpassing $650 billion, more than the defense budget. With this sordid economy in the background, President Trump has fired the head of the Bureau of Labor Statistics Erika McEntarfer an impartial government agency responsible for tracking jobs, wages and inflation. To chip away at the independence of Federal Reserve, Trump has not only expressed his desire of firing Fed Chair Jerome Powell in a social media post, he has also made a reckless move to fire Governor of Federal Reserve Lisa Cook on the charges of mortgage fraud.
President Trump tries to squeeze allies and adversaries alike by invoking trade, tariffs and tech wars just to avert the attention of Americans from the underperforming domestic economy. He has placed blame on several states for accruing trade deficits hitting the US and has sought to rewrite the rules of economic engagement with these countries through high tariffs and ‘Make in the US’ rules. However, economists argue these wars would lead to higher prices for American consumers and businesses and disrupt supply chains. When the chief economist of Goldman Sachs, an American multinational investment bank and financial company, remarked that tariffs are inflationary, Trump reacted through a social media post writing: Goldman Chief Executive David Solomon should “not bother running a major financial institution”.
By tinkering with the independence of Federal Reserve that controls the flow of money and credit and thereby shapes and regulates key indicators of economic health such as economic growth, inflation, employment and financial stability in the country, Trump administration seeks to sacrifice long-term economic stability of the country for short term political gains. President Trump’s attacks on independent agencies and their statistics critical to the country’s economic status have led players in financial markets to look for alternative sources of data such as satellite images provided they can pay for them whereas free and publicly available data have been despised as unreliable by Trump.
Forged Economy
The Trump administration’s whimsical withdrawal of funds from and firing of staff of government agencies have led to lack of surveys, updating as well as evaporation of hundreds of US datasets and more than 8,000 government webpages. The Trump administration is in a process of manufacturing US economy through its concocted views and by erasing taxpayers funded statistics on which independent economists depend for their analysis. In this larger context, academics in the US have launched the Data Rescue Project to preserve and share these data publicly.
The US economy has been impeded by several crises taking massive toll on its domestic economy, for instance, opioid crisis that is resulting from increasing consumption of synthetic drugs such as fentanyl that claims over 100,000 American lives each year. The financial toll of this crisis runs in trillions with its impacts on productivity, health care and criminal justice systems. One of the reports of the National Institute on Drug Abuse (NIDA) estimated it to surpass $2 trillion annually. Similarly, estimated expenditures to run the expensive health care system and address climate related disasters, housing crisis, widening economic inequality, festering crimes need trillions of dollars which far outweigh the trade deficits with countries projected to be the primary economic issue preventing America from becoming great again. Congressional Budget Office (CBO) predicts the US government debt could rise to 150% of GDP by 2030, poised to threaten to destabilize the economy with higher interest rates and ongoing inflation. This debt means an annual loss of more than $1 trillion in interest payment. Without taking steps toward addressing the domestic economic issues, Trump administration is weaponizing trade that would encourage others to weaponize interdependence and rerouting supply chains. This would lead to flight of trade with and investment from the US in the long-term and de-dollarization of economy would happen swifter than expected. The Trump administration is in the process of forging a speculative market with circulation of less liquid and less accountable crypto-currencies which can hardly address the real financial crises in the long-term.
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