The international trade landscape has received a jolt from the Trump administration’s aggressive push for reciprocal tariffs. This not only signals a deeper retreat into economic insularity but is also symptomatic of a threat to global growth. This pivot by the world’s largest economy—once hailed as the biggest proponent of the laissez-faire system in international trade and finance—marks a dramatic departure from the liberalising tide of the past. In many ways, Trumpism, today, has become a metaphor for a world grappling with the tremors of resurgent protectionism. This inward turn in US trade policy and the reactionary measures by the second largest economy, China, have prompted a closer look at how emerging economies, in contrast, have navigated the liberalisation path over the same period. Against this backdrop, this article puts forth three core propositions: (a) since 2000, emerging economies have cut tariff rates more aggressively than advanced nations, with India leading the way, closely followed by China; (b) tariff levels in emerging markets are showing signs of convergence; (c) tariff liberalisation in India has spurred consumption, and may have laid the groundwork for a shift toward consumption-driven growth.
Emerging Economies and the Tariff Taper: India’s Subtle Leadership
