US-China Slowdown May Hit India Harder Than Trump Tariffs, Warns Economist Swaminathan Aiyar

As global markets remain on edge following Donald Trump’s latest tariff hike on Chinese imports, economists are raising deeper concerns—not just about trade wars, but about a potential economic slowdown in both the US and China. According to economist Swaminathan Aiyar, if the world’s two largest economies begin to slow down significantly, India could feel a far more severe economic impact than what any tariff change might bring.

“If there is going to be a major slowdown in the USA and China, the rest of the world will be affected—and India won’t be spared,” Aiyar said in an interview with ET Now. He pointed out that global economic interdependence means a downturn in major economies leads to ripples across developing nations, including India.

The warning comes at a time when Trump imposed a steep 145% tariff on Chinese goods, aiming to reduce the US’s dependence on imports and boost local manufacturing. While Indian exporters were temporarily relieved after the US paused tariffs on Indian goods for 90 days, many analysts believe this window may not be enough to prevent recessionary trends from taking hold globally.

Aiyar criticized the idea that tariffs will revive American manufacturing, calling the plan “a disaster” rather than a growth strategy. He believes such measures may disrupt supply chains, slow global trade, and fuel recession fears instead of economic recovery.

Amid this uncertainty, financial institutions are reacting cautiously. While Goldman Sachs slightly eased its recession forecast, it still expects the US economy to decelerate this year. Meanwhile, JPMorgan Chase has maintained its cautious outlook, citing ongoing policy uncertainty as a critical factor.

With global volatility rising, India’s economic prospects now depend not just on its internal reforms, but also on how external shocks—from Trump’s trade policies to US-China relations—unfold. The next few months will be crucial for policymakers and investors watching for signs of deeper economic shifts.