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President Trump's Tariff Policies Cause Market Turmoil

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On April 4, 2025, President Donald Trump’s aggressive tariff policies sent shockwaves through global financial markets, triggering widespread turmoil and stoking fears of an economic downturn. The administration’s decision to impose sweeping tariffs—ranging from a 10% baseline on all imports to targeted rates as high as 50% on key trading partners like China, Canada, and Mexico—marked a dramatic escalation in Trump’s long-standing pledge to reshape U.S. trade. While the president touts these measures as a means to boost domestic manufacturing and reduce the $1.2 trillion goods trade deficit, the immediate fallout has been a steep market sell-off, with the S&P 500 plunging nearly 5% in a single day, its worst performance since June 2020. The tariffs, unveiled in a White House address, aim to retaliate against perceived trade imbalances and practices like currency manipulation. Trump argues they will force companies to relocate production to the U.S., creating jobs and strengthenin...
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India’s ONDC e‑commerce network one‑year scorecard – has it dented Amazon/Flipkart?

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In its April 2025 monetary policy review, the Reserve Bank of India (RBI) maintained the repo rate at 6.5% for the 11th consecutive time, emphasizing a neutral stance to balance inflation control with economic growth.  However, the central bank implemented measures to enhance rupee liquidity amid concerns over tightening financial conditions.


To address liquidity constraints, the RBI reduced the Cash Reserve Ratio (CRR) by 50 basis points to 4% in two phases, effective December 2024. This move is expected to inject approximately ₹1.16 lakh crore into the banking system, facilitating increased lending capacity.  Additionally, the RBI relaxed liquidity coverage ratio norms, potentially freeing up around ₹3 trillion ($35 billion) for banks, thereby supporting credit growth. 

On the inflation front, the RBI retained its forecast for FY2025 at 4.8%, with expectations of moderation to 4.2% in FY2026, assuming normal monsoon conditions and stable food prices.  The central bank highlighted that recent inflationary pressures, particularly in food prices, have eased, providing room for cautious optimism.

Despite these measures, RBI Governor Sanjay Malhotra expressed concerns about declining liquidity in the call money market, which could hinder effective monetary policy transmission.  To mitigate this, the RBI conducted open market operations and forex swaps to ensure adequate liquidity and maintain orderly market conditions. 

In summary, the RBI's April 2025 policy review reflects a strategic approach to bolster rupee liquidity while keeping inflation within target ranges, aiming to support economic growth amidst global uncertainties.

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