Trade war, tariff, and now air strikes: Donald Trump pushes world to brink of ‘great depression’; will it impact India?

Amid the Iran-Israel war, the US attacked Iran’s Fordo, Isfahan and Natanz nuclear sites, aiming to destroy the country’s nuclear programme. US President Donald Trump warned of additional strikes if Iran retaliates. Since becoming US President in January this year, Trump has hit headlines due to various reasons, including trade war, tariffs and now air strikes on Iran. This has brought the world to the brink of a ‘great depression’. 

Trump’s actions have benefited neither the US  nor the world. By jumping into the war between Iran and Israel, Trump has again put the world in trouble. This is when the world is already trying to recover from his absurd tariff policy. Perhaps India too will not remain untouched by it. Trump’s ‘America First’ policies and his trade wars, especially the use of tariffs, have caused a lot of turmoil in the global economy. Fears of a great depression are also being expressed about this. Now, US involvement in the Iran-Israel war has increased tensions in the entire Middle East. 

The energy security of many countries has come under threat as Iran has threatened to close the Strait of Hormuz, a narrow passage connecting the Persian Gulf to the Arabian Sea. The strait is a vital chokepoint for global oil shipments and handles nearly a fifth of the world’s petroleum trade. Iran’s Parliament has approved the closing of the Strait of Hormuz.

Impact of trade war and tariffs: Obstruction in global trade

The Trump administration has imposed heavy tariffs on many countries, including China, Canada, Mexico and the European Union. In response to these tariffs, the affected countries have also imposed retaliatory tariffs on American products. This has disrupted the flow of global trade. Import-export has become expensive for companies. Global supply chains have been affected.

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Impact on India

India has also been affected by Trump’s tariff policies. The US has also imposed some tariffs on India, which has increased challenges for Indian exporters. Moreover, oil prices have surged after the Iranian Parliament approved a proposal to close the Strait of Hormuz. The price has reached the highest level in five months. About 20 per cent of the world’s total crude oil passes through this route. 

India imports more than 80 per cent of its oil needs. India’s dependence on other countries for crude is very high. Due to the increase in crude prices, petrol and diesel will become expensive in India. This will also affect other things.

However, Union Petroleum Minister Hardeep Singh Puri on Sunday tweeted that India has diversified its supplies in the past few years, and a large volume of supplies does not come through the Strait of Hormuz now. He added that India’s Oil Marketing Companies have supplies for several weeks and continue to receive energy supplies from several routes.