Insular policies - which promote domestic production and raise tariff walls - have become the order of the day since the Covid-19 pandemic. Now imagine thatapproach, but on steroids. 

That is the predicament the world is facing after the new Donald Trump Administration in the United States (US) moved on imposing new tariffs, including reciprocal levies on foreign goods equivalent to those imposed on American products. Non-tariff barriers will also be gauged.

The measures are likely to come into effect towards the second half of this year after the US administration completes its assessment. This has raised concerns about US inflation, postponed rate cuts from the US Federal Reserve and strengthened US bond yields. In this environment, emerging markets are witnessing capital outflows and weakening currencies, with India being no exception. To boot, these developments have accentuated uncertainty, which leads to business decisions being postponed.