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Marko Papic, Chief Strategist at BCA Research, believes there has been a clear shift in the US administration’s trade policy, with a softer approach towards tariffs and a greater focus on negotiation.
“The fact that the Trump administration has pivoted pretty hard away from some other verbiage, towards this kind of idea that they are just simply seeking fair trade and that they want to lower tariffs, I think that is extremely positive.”
He contrasted the current tone with earlier rhetoric, saying, “Remember when tariffs were about raising revenue for the US Treasury... that’s where we were five months ago.” He added that the focus has now shifted to, “We just want India to lower tariffs in America,” indicating a move from confrontation to cooperation.
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Papic remains cautious on India’s market outlook. While India has performed well over the past four years, he suggested its momentum could slow compared to other emerging markets. "The delta in Indian performance is going to slow down," he said, citing valuation concerns and increasing competition from commodity-driven economies and China.
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He also believes April 2 marks the peak of de-globalisation fears, predicting that markets will stabilise after the initial tariff reaction. “This may be the worst moment—every new news item after this becomes better,” he explained, adding that a potential buying opportunity could emerge after April 3, depending on how negotiations unfold.
Looking at broader market trends, Papic expects European, Chinese, and other emerging markets to outperform US equities over the next five years, partly due to a weakening US dollar. He also sees commodities in a long-term bull market, highlighting that prices have remained resilient even when China's economy struggled. A slight economic revival in China, he suggested, could push commodities even higher.
On oil prices, Papic warns of potential upside risks driven by geopolitical factors, including possible secondary sanctions on Russia and tensions with Iran. He stated that while Trump has not yet imposed harsher restrictions on Russian oil, any policy shift in this direction could significantly impact global energy markets.
Also Read: US tariffs less worrisome for India; financial market risks loom larger, says Axis' Neelkanth Mishra
For the entire interview, watch the accompanying video
