In a recent report, Morgan Stanley said India and Japan are the least exposed to US trade tariffs. The study highlights that India’s lower reliance on goods exports to GDP helps shield its economy from global trade pressures. Recently, the US has imposed a 25 per cent tariff on auto imports, which is expected to hit Japan and South Korea the hardest. Auto exports to the US make up 7 per cent of their total exports.
The US is also planning new tariffs on industries like energy, pharmaceuticals, semiconductors, agriculture, and metals. Experts warn that rising trade uncertainties could hurt business investments and global trade. With a major trade deficit in autos, the US imports heavily from Asia, mainly Japan, Korea, and China. If tariffs stay high, Japan’s economy could take a hit, with growth slowing by 0.2 to 0.3 percentage points.
As per the report, for now, India remains relatively safe from these trade tensions because of its strong domestic market.
