4 days ago
The shifting global landscape following the 2024 US elections shows that America's inward turn marks a significant transformation, says Ramesh Damani, Member at BSE. In a conversation with CNBC-TV18, Damani discusses the impact of Trump 2.0 on markets, emphasising the US's inward turn and its implications on globalisation.
America remains the most influential player both politically and economically, and this shift will have far-reaching consequences, he said.
Damani sees the current uncertainty surrounding globalisation as a temporary setback rather than a permanent shift.
He said, “The bad news is globalisation under a cloud right now, it's under a very serious cloud. The good news that is my personal belief and my personal call that these are irreversible changes, that you could delay globalisation by another three years or four years. It will delay globalisation, but it cannot deny it, because the human arc works towards progress.”
While he acknowledges that globalisation is under significant pressure, with rising geopolitical tensions and protectionist policies reshaping global influence, he believes these changes are not irreversible.
He said, “It's very hard for me to believe that we will go back to a tariff based policy, as Trump is advocating. Either he will change, or democracy and the people's aspirations will force him to change.”
Damani believes that Donald Trump and his supporters are set to face a tough economic reality. Trump's core objective is to revive American manufacturing, which has significantly shifted overseas, with the U.S. relying on imports from China, Vietnam, the Philippines, and India for critical goods, excluding technology.
To achieve this, the Trump administration has pursued a mix of policies, including tax cuts that lowered corporate tax rates to around 15%, pressure on the Federal Reserve to reduce interest rates, and the imposition of tariffs to protect domestic industries. The goal is to restore manufacturing jobs and cater to the voter base that backed Trump.
However, Damani suggests that this approach may not yield the intended results, highlighting the complexities of global trade and economic interdependence.
Damani primarily focuses on the Indian and American markets, but he sees emerging potential in Europe despite its current challenges.
While a European bull market may seem unlikely given ongoing economic uncertainties, he draws a parallel to India's crisis in 1991 when the market was at a low point before a significant turnaround.
Damani suggests that moments of crisis often serve as a foundation for future bull markets, making Europe a region worth monitoring for long-term investment opportunities.
(Edited by : Unnikrishnan)
