‘US has gone rogue on trade...’: Jefferies' Chris Wood calls Donald Trump’s 50% tariff on India a ‘xenophobic autarky’; slams ‘beggar thy neighbour’ policy

Investment expert Chris Wood has characterised US President Donald Trump's 50% tariff on India and Brazil as "xenophobic autarky", suggesting that the United States has deviated from established international trade practices.

According to Wood, the United States has gone rogue, abandoning the principles of the international trading system, which originated with GATT's establishment in 1947.


"Xenophobic autarky is the appropriate phrase GREED & fear heard one gentleman employ in the context of the latest extreme moves as regards tariffs this week, in term of the 50% tariffs now levied against India and Brazil, let alone the 100% tariff on imported chips, but with exemptions made for those companies which have pledged investments in America, such as TSMC, Samsung Electronics and Hynix," Christopher Wood, Global Head of Equity Strategy at Jefferies, has said in his weekly newsletter according to an ET report.

Also Read | Explainer: Donald Trump’s 50% tariffs - will India budge on Russia crude oil trade?

Trump’s ‘Beggar Thy Neighbour’ tariff policy

Wood, recognised for his optimistic stance on India in emerging markets, advises countries to respond collectively rather than pursuing individual agreements with the US. He notes, "Meanwhile, there remains the legal question of whether Donald Trump has the authority to make these moves. GREED & fear would advise the rest of the world to act collectively rather than each country seeking to do its own deal with the US, which is a strategy that undermines the multilateral world on which so much prosperity has been built."

The implementation of an additional 25% tariff on India for purchasing Russian oil becomes effective from August 27, elevating the total duty to 50%, which renders exports unfeasible in the impacted sectors.

Wood noted that tariffs are counterproductive policies that harm all parties involved, suggesting that prolonged implementation would likely result in escalating negative effects. He described tariffs as ‘beggar thy neighbour’ policies.

Previously, Jefferies' Mahesh Nandurkar cautioned that the revised tariff structure could potentially affect the majority of India's exports to the US, valued at US$87bn (2.2% of GDP).

Also Read | Donald Trump’s 50% tariffs on India: What does it mean for the stock market & what should investors do? Explained

Currently, only pharmaceutical and electronics sectors, comprising approximately 30% of India's exports to the US, remain unaffected. The sectors facing significant impact include textiles, chemicals, auto ancillaries and fisheries.

Goldman Sachs had previously estimated a 0.3 percentage point reduction in GDP growth from the initial 25% tariff. The additional duties could potentially cause "a potential incremental drag of around another 0.3pp (annualized)," effectively doubling the economic impact.

Nevertheless, Goldman remains cautiously optimistic regarding the three-week negotiation period: "We see downside risks to our growth estimates for both CY25 and CY26, but are not making any changes to our growth forecasts at the moment, given that there is a three-week window for negotiations."

Also Read | India-US trade deal: With Donald Trump’s 50% tariffs looming, India reviews market access offers for US; three-pronged strategy to protect exporters
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