Tariff wars can disrupt supply chains, cloud investment decisions: FM Sitharaman

The escalating tariff wars and growing protectionism can disrupt global supply chains, clouding investment decisions around the world, Finance Minister Smt. Nirmala Sitharaman said on Thursday.

“We recognize that the global landscape is changing and changing rapidly… the recalibration efforts on trade are very, very challenging. It is worrisome, but it is also going to be very challenging. The intensification of tariff wars and the rise of protectionist policies have the potential to disrupt global supply chains, increase production costs and create uncertainty in investment decisions across borders as well,” Sitharaman, who speaking at an event marking the 150th anniversary of BSE, said.

Sitharaman said that uncertainty induced by the tariff wars has had a “ripple effect” on financial markets across the world, including on Indian markets.The US on Wednesday slapped a steep 245% import tax on a wide range of Chinese goods, which could lead to a rerouting of Chinese exports to India. The hostility between the world’s top two economies has worsened since the US imposed 145% tariffs on Chinese goods earlier this month. China retaliated with a 125% levy on American imports and also tightened exports of rare earth metals critical to high-tech and defence sectors.