Trinh Profile picture
Aug 22 14 tweets 9 min read Read on X
Eight months after Trump has been inaugurated and we of course have now the EU US deal. What do we know about Trumponomics?

I would say my read is the Miran paper is a blueprint for Trump actions so far on trade. Let's see what I mean by that. And this has consequences of how Trump sees India, which I think is not just escalation to gain leverage.
First, let's talk about an important ally, the EU. The details are out and I would say this is actually rather good for the EU in the context of out of control Trump tariffs.

Why? EU tariffs are NOT stacked. They are ceilings. As in, they get 15% max, including sectoral tariffs like auto (including car parts), pharma, semiconductor, lumber etc but not steel & alum, which they are still trying to negotiate. There are some additional exemptions for EU products such as aircraft, parts, generic pharmas & ingredients etc.Image
Meaning, to trade for this 15%, the EU is falling closer into the US orbit via investment and trade as well as defense, which it is working on being more self sufficient with increased spending but not just yet.

Anyway, what can you say about other allies? It means South Korea and Japan can and hopefully have similar terms.

Remember that reciprocal tariffs under IEEPA aren't the only ones. Section 232s are pretty scary and more stuff being added all the time without warnings.

An example is steel where a few days ago 400 more products were added to include steel derivatives.

So if you want to have access, this is basically what the costs are and so what does that tell you about others? Here I go back to the Miran paper.
So here is Asia so far. Note for China, it's actually 55% if we include Trump 1.0 but here is just Trump 2.0.

India sticks out like a sore thumb with the added 25%. Even before, 25% is second highest.

China at 55% is highest if we include Trump 1.0. Image
In the Miran paper, Trump is reorganizing allies/neutral/siding with Russia/China and then finally Russia/China.

So now we see that the EU, Japan, and SK are falling into US orbit of having 15% (only EU is confirmed that tariffs are not stacked so far) and will be drawn closer via more investment and defense collaboration etc.

Southeast Asia except Singapore (10%, which obvs while playing both China and the US but tilts towards US) is 20%-ish level with ambiguity on STACKED or not and also UNCERTAINTY ON SECTORAL and finally 40% transshipment applies to all countries and not just Southeast Asia.

Where does India stand?Image
First, I don't work in the Trump admin or have any INSIDE knowledge. This is just my read on what I have seen in actions, and while they have oscillated in intensity, the DIRECTION has been clear.

Trump knows who the adversaries are. Russia and China. They are not our friends. That being said, he is IMPATIENT and want quick wins and he realizes he can't. Russia and China are waiting him out. Putin for example keeps negotiating with Trump but it's clear he's just buying time and so Trump will have to make choices that he doesn't like to make.

For India, I am not a geopolitical expert but obvious if you read the timeline of US India relationships, they have been somewhat characterized but not great historically. The US sanctioned India not too far back for trying to develop nuclear weapons etc. It's only since Obama that this tilt for India has happened.

As in, they have a shared interest of, well, I would say the fear of China & of course and democracy and all that but I don't think that matters as much.

Where they don't share interests is many. Pakistan is an example. Russia is another.

The US would like India to be more adversarial to Russia, which won't happen.

India wants the US to be more adversarial to Pakistan, which well...

Btw, China is the same except China doesn't want the same as the US and China and India do have on-going border disputes and China has basically GAINED power into India's traditional sphere of influence - namely Sri Lanka, Bangladesh, and of course Maldives as well as other countries.

Therefore, we go back to why the US and India warmed ties, which obviously have FRACTURED since, well, according to India, the Pakistan mediation, well before tariffs.Image
Here is a timeline of US-India relations in case you are interested. A bit of a history lesson for those not as familiar starting from PM Nehru's 1949 visit to the US.

cfr.org/timeline/us-in…Image
Okay, this can go on too long so I'll go straight to the point. The assumption from the Indian side is that Trump is just being Trump and that he's upping the ante for leverage to get India to open AGRICULTURE + DAIRY.

First, this is a misunderstanding. Trump actually doesn't care that much about this. Look at EU, Japan and South Korea. None had to open up their "bottom line", which for SK is rice and beef etc. But if you have a bottom line, then you offered something else, and that they offered INVESTMENT. Will this happen? Who knows. But they did.

So I knew that a deal wasn't going to come for India. Remember that India STARTED OUT AHEAD OF VIETNAM, which faced the threat of 46% while India was only 26%.
Here is my Times of India op-ed on why I concluded that Modi wasn't going to give Trump much.

Why? Well, the UK does was very LIGHT in how much India was going to open up. It was supposedly a free trade agreement but the opening up is very gradual.

And there's nothing wrong with that. It's going to do things at its own pace.

But for Trump team, well, if you have >100% tariffs on autos + >35% tariff on agri etc, 25% tariff on India seems fair.

Btw, India used to have tariff free to the US as emerging markets had preferential access but Trump canceled that as he didn't think it was fair given high tariffs in India etc.

timesofindia.indiatimes.com/blogs/voices/u…
So here is why I want to go back to the Miran paper on how Trump team sees India. First, India pivot is what the geopolitical experts in DC etc thought of as they, well, under Obama, started to move to shore up the Asia Pacific to counter China.

Remember TPP? Dead under Trump 1.0. Gone.

India, well, for Trump is transactional. He doesn't mind it but i would imagine if you do the questions below of the fact that India sees Russia as a friend and upped the buying of oil, which Trump sees as, well not helpful to his trying for a quick end to the war, well, well, well.

Anyway, I am not defending this move. It is just my read of how Trump team sees it. The 25% can just disappear as quick as they appeared (deadline is 27th August).

But Trump has limited interest in helping India gain more of China high-tech supply chain. Read his comments about Apple moving to India to sell to the US.

China has ZERO interest in India gaining more of China supply chain - it has curbed equipment export.Image
Is this a China/Russia win? Well, Russia has always been able to count in India as a friend and buyer of oil since 2022, so it I suppose can count on it more.

For India, the relationship with Russia is not just about oil but arms and hedge to China.

Given the fact that it is not yet self sufficient in arms, it needs friends or imports.

Long story short, I see chances of the 25% slapped on India by the US disappear. I also see it sticking. Look at Switzerland. Got 39% for not much reasoning at all.

Also Brazil got 10% reciprocal tariff but 40% on random reason not related to trade or say geopolitics.

Btw, at any given point, I am not making any normative argument of whether this is FAIR or UNFAIR or STRATEGICALLY SOUND. But rather, of what I see how they see it.
So the question is what comes next if Trump team decides to stick with 50%. I suppose there can be retaliation and what not but I doubt it.

Why? India tariffs are high so no need to retaliate. It got pretty high tariffs.

It can move into other spheres like purchases of Boeings, arms, services etc.

But I don't think such escalation would occur. I think India will just ride this out and hope this is a Trump thing not a consistent US foreign policy approach.

Either way, I feel the same way for India as I felt when Vietnam got 46% - very sad about it. But now, the tide has turned for Vietnam. Many there actually feel decent about the 20% and in fact seeing this as an opportunity to gain even more export market share and investment.
If we were to look at this optimistically, one can say that externally challenges MAY and USUALLY spur DOMESTIC REFORMS that are politically more difficult.

GST rationalization is one. But the real reforms India needs is much deeper - labor, land and I suppose the agrarian sector in general. All these things are unlikely tackled but they could.

The reality is exports as a share of GDP is small. Exports to the US is just a bit above 2% of GDP and the affected sectors are just USD52bn of goods.

So say we are looking at potentially a 26bn LOSS of exports if 50% goes into effect.

But that is a simplistic way to calculate impact to GDP.Image
For most, they say, well, if 50% sticks, then, well that's a rounding error or say 50bps or 70bps to GDP impact.

If we cut GST and rationalize it, then it's not a big deal. Growth may even go UP!

That certainly can be true. But the reality is that India labor market is totally under-employed. So while we can say that this is rounding error, the fact that 800m people receive free gains and the government every year has to give income to farmers to make up for low output tell us that survival is not being questioned but prosperity for the low skilled is.Image

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More from @Trinhnomics

Aug 21
Russia import imports since 2022. If this calculation is correct, the arbitrage is USD2.5/barrel currently, then annual saving is USD1.5bn. Image
India trade balance with BRICS: It buys way more than it sells.

Some say more BRICS is the answer. But looking at trade as it is right now, what needs to happen? Image
India total exports to all the countries in BRICS is less than just to the US alone. Image
Read 7 tweets
Aug 1
Guys, let's do it. All things Trump tariffs. Here we go. First, let's talk about the basics. 10% is the floor as in everyone gets that. And these are the economies that get higher than that:
15% (EU, Japan, South Korea and 33 countries: Angola, Botswana, etc.)
18% (Nicaragua)
19% (Cambodia, Indonesia, Malaysia, Pakistan, Philippines, Thailand)
20% (Bangladesh, Sri Lanka, Taiwan, Vietnam)
25% (Brunei, India, Kazakhstan, Moldova, Tunisia)
30% (Algeria, Bosnia and Herzegovina, Libya, South Africa)
35% (Iraq, Serbia)
39% (Switzerland)
40% (Laos, Myanmar)
41% (Syria)
In Asia, it looks like this. Excluding China and Myanmar, Laos, India got the highest - 25% and maybe more.

China is waiting for talks on extension. Right now, it's 10% reciprocal + 20% fentanyl during extension + 25% during Trump 1.0

Southeast Asia gets 20% to 19% except Laos & Myanmar at 40%, Brunei is 25% but energy is exempt so...Image
India original was 26% so 25% seems bad but frankly not too far from the Southeast Asians. That being said, India was aiming closer to 15% as Vietnam got dropped from 46% to 20%.

Anyway, let's talk about details of the White House info.

It goes into effect 7th August. But if you got stuff in ports/front-loading and not yet consumed till 1 October, there are varied rates for them.

Long story short, there is still time to negotiate this down before it goes into effect basically.Image
Read 13 tweets
Jul 30
Trump tariff strikes India at 25% plus Russian oil import punishment. Is it a surprise? Not exactly. I have been thinking for a week what a US India deal look like. And to be honest, I think I saw this coming. I think India can negotiate down from this threat btw. It's not final. But how much lower and what are the costs?
Why is it not a surprise that India is not getting the deal that it is working hard on?

First, let's look at the EU and Japan - they got smacked with 15% tariff & got reprieve for auto (and other sectors) but auto is key at 15%.

So 15% is the best India can get. And it won't get it. Why? Well, it has to offer a lot to Trump to get that and it won't.
Remember that this is just a threat (similar to what Trump did with Japan before they settled on a lower number) and the threat I suppose can be real or not. Irrespective, he cares about it enough to post about it.

Trump has a few agendas that he wants India or Modi's help with.

Ending that Ukraine War is one. And India is not interested in that. It's an emerging country that buys where it can cheapest.

Russian oil is cheapest & so it buys from Russia & Trump wants to starve Russia of oil revenue. India doesn't want to not buy the cheapest oil possible. Besides, Russia is neither a foe nor a friend.

Maybe the West's foe but not India. So on this point, very hard. What are the costs to India? Well, it will have to pay more for its oil if it doesn't buy the cheapest oil.

Trump is adding to that costs - tariff.
Read 6 tweets
Jul 28
India imported 15,000 cars a year. Why? It has 110% tariff on autos. Now, trade negotiations are not going well and it's approaching the WTO on Trump's 25% auto tariff.

But the reason is simple. India exports more than it imports autos. Why? It has pretty high tariff on auto.

What would an India trade deal look like then? Is there going to be one?Image
What's interesting is that the UK and India signed a trade deal that is supposedly a huge game changer.

Let's take a look at it.

Under the agreement, tariffs on imports of internal combustion engine (ICE) cars will be slashed to 30-50% in the first year of implementation, but with the benefit limited to a quota of 20,000 cars.

The tariffs will be reduced gradually, and after 15 years, they will become 10 per cent, with the quota set at 15,000 units. For out-of-quota imports of ICE cars, the duties are reduced to 60-95 per cent in the first year, and further to 45-50 per cent from the tenth year onwards.
So on the surface, it looks like a big deal but the quotas are so tiny that it makes one wonder.

Of course, relative to annual import, quotas are HUGE as it is MORE than annual import.

But why do people care so much about US 25% auto tariff but don't care so much about India's 110% auto tariff?

Well, because the US imports 8m cars EVERY YEAR.

Look at the big deal that is the UK and India trade deal liberalization. There is a limit in quota.

The quota that the US sets for the UK is 100,000. So in other words, the US remains a big deal and one that needs to be negotiated with.
Read 4 tweets
Jul 16
Reading this article with great amusement with tons of comments that are so emotional & not backed by why. And they all seem so surprised on outcome. I have been saying this all along - the pass-through of tariffs are not as you think it will be. Why? Because you need to understand how they work & who has the negotiating power.

First, this statement here: "China’s retaliatory tariffs on American imports, the most sustained and significant of any country, have not had the same effect, with overall income from custom duties only 1.9 per cent higher in May 2025 than the year before."

ft.com/content/82e32f…
I mean, it seems to admire China's retaliation, as in it, that is the great thing to do.

Why didn't China collect more import duties even though it retaliated?

Well, because China is not GROWING its imports. It's exporting its deflation.

So its retaliation doesn't have as much "meat" so to speak. They need to sell more than they need to buy.
"But despite US tariffs hitting levels not seen since the 1930s, the timidity of the global response to Trump has forestalled a retaliatory spiral of the kind that decimated global trade between the first and second world wars."

They are so upset at the world for not retaliating. You can sense that in the usage. But remember, the US is a lot of countries' number 1 export market.

So you are not going to PISS off your #1 customer. It's just that simple. Why? Because a lot of countries just don't want to be powering their GROWTH via GROWING IMPORTS.

So what? Well, you then be captive to your "customer". You can always sell somewhere else.

Remember that India got like TONS OF TARIFFS. No one says much. They just say, well, they just tariff Indians & make it expensive for them to buy. Do they retaliate with the same tariff? No. They can, but why would you match someone's policies.

These are Trump's policies on US IMPORTS. You can also TAX your own imports. Btw, MANY COUNTRIES DO.
Read 5 tweets
Jul 9
Let's talk about India today. I'll be on @CNBCi at 11am HKT to discuss this particular issue.

First, we all know that India is amongst the least trade exposed and least exposed to the US amongst the big traders.

That being said, the US is the MOST lucrative export market and one it MUST grow if it wants to GROW OUTWARD AND UPWARD through trade.

Why? Look at China PPI today - it's is -3.6%YoY. Look at the Chinese yuan. It is not appreciating like crazy versus the USD. So what? China manufacturing is TOO competitive and will COMPETE with India so exporting to China is not a HIGH MARGIN BUSINESS.

That is the same for everyone who is a big trader. China is a competitor. So fierce that even the Chinese government is struggling w/ this onshore deflated PPI situation so you can see why foreign competitors are pissed off.
First, let's zoom in - India's export as a share of GDP is roughly 2.5% of GDP in 2024. As mentioned, 0.8% is exempted now (pharma, electronics etc). But EXEMPTIONS ARE TEMPORARY. Today, we got threats of 200% tariffs on pharma for example.

Anyway, 1.3% of GDP faces 10% tariff now that will go up to 26% by 1 August if not successfully negotiated down.

India is not too exposed by Trump auto and steel but still somewhat.Image
Let's look at top 15 exports to the US.

#1 PHARMA, currently exempted but faces sectoral tariffs of a lot.

Look at what India exports to China - ZERO. Zero pharma. 3bn to the EU and 9bn to the US.

So here, you can see that INDIA NEEDS A DEAL.

You can go through all the sectors. Note something. In phones, the EU is a bigger market than the US. Yes 8bn vs US 7bn.

But the EU is not a country but made up of 27 countries. So the US is the LARGEST market by a long shot.

Look at all the ZEROS for China for top items. Not a good market for India.Image
Read 9 tweets

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