In February 2025, US President Donald Trump’s announcement of a 30-day pause on tariffs against Mexico and Canada brought a brief sense of relief to global markets. The decision helped prevent a potential escalation of a full-blown trade war, with US equity futures and international markets responding positively. However, concerns linger about the long-term effects of tariffs on industries such as automotive, semiconductor, consumer goods, e-commerce, and green energy.

The tariff dispute began when Trump proposed hefty tariffs on goods from the US’ largest trading partners, triggering retaliatory measures from China, Canada, and the EU. These tensions are leading to fears of a slowdown in global economic growth, disruptions in supply chains, and price hikes for consumers. Key industries like the auto sector, semiconductor manufacturers, and e-commerce giants are particularly vulnerable to these trade measures.

Indian investors also face a complex situation, with the rupee’s depreciation offering both challenges and opportunities. A weaker rupee can amplify returns from US stocks, but also make imports costlier for the country. This article delves into the impact of trade policies on various sectors, the global market’s response, and the implications for Indian investors navigating these uncertain times.