India Emerges as Strategic Winner Amid U.S. Tariff War, Eyes Expanded Trade Role

Economic

China–U.S. Trade War

Summary:

As U.S.-China trade tensions intensify, India is capitalizing on the fallout. Apple’s production shift and growing U.S.-India cooperation highlight Prime Minister Modi’s success in turning a volatile global environment into a strategic advantage...

India Turns Global Trade Turmoil into Strategic Leverage

The ongoing trade war initiated by President Donald Trump has created disruptions in global supply chains—but also opened rare opportunities. Among the beneficiaries, India is emerging as a standout, leveraging its geopolitical rivalry with China and Prime Minister Narendra Modi’s active diplomacy to position itself as a more reliable partner for the United States.

India’s pivot is not accidental. As tensions between Washington and Beijing escalate, India’s historical skepticism toward China, combined with its economic ambitions, has become a strategic asset. By aligning more closely with the U.S. and other democratic allies through platforms like the Quadrilateral Security Dialogue (Quad), India has turned geopolitical headwinds into trade momentum.

Apple’s Major Supply Chain Shift Boosts India’s Industrial Footprint

One of the most concrete signals of India’s rising importance in global trade is Apple’s decision to relocate part of its iPhone production from China to India. Facing U.S. tariffs of up to 145% on Chinese goods, Apple announced plans to shift the production of up to 60 million iPhones annually—destined for the U.S. market—from Chinese factories to Indian facilities. While the transition is expected to stretch through 2026, this move marks a landmark reconfiguration in the global tech supply chain.

This shift also aligns with India’s “Make in India” campaign and offers significant economic upside. It not only increases manufacturing jobs and investment but also strengthens India’s case as a long-term alternative to China in high-value electronics production. Even if the transition is slower than anticipated, the direction is clear: India is becoming central to corporate strategies seeking tariff insulation and geopolitical hedging.

Diplomacy Backed by Trade Reforms: Modi's Calculated Gamble

Prime Minister Modi’s diplomatic agility has played a vital role in this transformation. Unlike other global leaders who have adopted confrontational rhetoric, Modi has approached the Trump administration with a conciliatory and pragmatic stance. His administration has actively engaged with U.S. officials, including a recent visit to Washington by India’s lead trade negotiator Rajesh Agrawal. These efforts are paving the way for what U.S. Treasury Secretary Scott Bessent described as “one of the first new bilateral trade deals” expected later this year.

Despite India’s traditionally protectionist trade posture, Modi has initiated negotiations with the EU, the UK, and others, signaling a broader rethinking of economic strategy. This shift suggests that India is not only reacting to short-term tariff concerns but is also preparing to reposition itself within a more fragmented and competitive global trading system.

Balancing Opportunity and Constraint

While the outlook is promising, challenges remain. Opening India’s market to U.S. exports could face domestic resistance, given its long-standing protective policies aimed at shielding local industries. Yet the Modi administration’s willingness to rethink these boundaries reflects a broader strategic calculus: economic liberalization, when paired with geopolitical alignment, may offer India a greater voice in global trade governance.

Additionally, India’s logistics and infrastructure must keep pace with growing demand. Large-scale relocations like Apple’s require improvements in ports, skilled labor availability, and policy consistency. Success will hinge not just on diplomatic charm but on execution at scale.

India’s rise amid the U.S.-China tariff war is a product of both global realignment and deliberate national strategy. As protectionist policies reconfigure old alliances and manufacturing hubs, New Delhi is navigating the uncertainty with a rare combination of flexibility and foresight. With major corporations like Apple shifting supply chains and a bilateral trade deal with the U.S. on the horizon, India is poised to assert itself not only as a production base but as a political and economic power shaping the next era of global trade.

Source: FT

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Gerik

Economic

Manufacturing Slips Again Under Tariff Pressure

The U.S. manufacturing sector continued to decline in April, marking the second straight month of contraction as tariffs imposed under President Donald Trump’s “Liberation Day” policy disrupted supply chains and inflated production costs. According to the Institute for Supply Management (ISM), the Manufacturing Purchasing Managers' Index (PMI) dropped to a five-month low of 48.7—below the neutral 50 mark that separates expansion from contraction. This trend reinforces growing concerns that trade protectionism is undermining industrial momentum.

Every industry surveyed by ISM cited tariffs as a negative factor, not only for cost inflation but also due to the disorderly implementation and lack of clarity around import duties. Manufacturers reported longer supplier delivery times, rising inventories, and frozen shipments from China, all of which indicate distorted operations and weakened demand clarity.

Input Costs Surge, Orders Distorted by Tariff Deadlines

The survey's forward-looking components painted a mixed picture. New orders rose slightly to 47.2 from 45.2 in March, largely due to businesses rushing to place orders before tariffs took effect. Supplier delivery times lengthened to 55.2, and inventories continued to grow—but analysts warn that these are artificial bulges driven by short-term tariff-avoidance behavior rather than healthy demand expansion.

Most notably, input costs climbed again, with the prices-paid index reaching 69.8—the highest since June 2022. Manufacturers of nonmetallic minerals said procurement had been “paralyzed,” and machinery producers described the current climate as “tariff whiplash.” Some domestic suppliers were also raising prices, taking advantage of the constrained trade landscape.

Job Losses Begin to Appear as Caution Spreads

The labor market is showing early signs of stress. While most manufacturers have so far resisted large-scale layoffs, many are pausing hiring, and some are beginning to shed jobs to adjust to uncertain demand. ISM’s April report confirmed this, noting that layoffs were chosen over natural attrition due to speed and efficiency.

Supporting this, the Labor Department reported a sharp increase in unemployment claims, which jumped by 18,000 to 241,000 in the week ending April 26. Continuing claims surged by 83,000 to nearly 1.92 million—the highest since November 2021—indicating weaker hiring activity. While some of the rise was seasonal (due to school spring breaks in New York), the broader upward trend is now unmistakable.

Major employers have begun cutting back. UPS, for example, announced 20,000 job cuts and the closure of 73 facilities as it scales back deliveries for Amazon. Analysts warn that if more companies follow suit, the labor market could shift quickly from resilience to contraction.

Trump’s Trade Policy Raises Broader Economic Risks

The 145% tariffs on Chinese goods announced in April, along with sweeping duties on other imports, have sparked what some economists are calling “tariff-driven recessionary pressure.” The U.S. economy already contracted in Q1—largely due to a surge in front-loaded imports ahead of tariffs—and further weakening in manufacturing and labor indicators may signal deeper trouble ahead.

While markets rallied on Thursday, with the Dow, S&P 500, and Nasdaq all posting gains, economists caution that investor optimism may not align with real economic trends. The full effects of protectionist policies are still unfolding, and the delayed impact on consumer spending, hiring, and investment could become more evident in Q2.

Looking Ahead: All Eyes on Friday’s Jobs Report

The next key data point is April’s nonfarm payroll report, due Friday. Analysts expect job growth to slow to 130,000 from 228,000 in March, with the unemployment rate holding at 4.2%. If confirmed, this would suggest the labor market is beginning to cool—a trend that, if reinforced by further tariff escalation, could pose a significant drag on domestic demand.

The April data offer a sobering view of how quickly tariffs can disrupt industrial activity and inflate business costs. The ISM PMI’s second straight decline, rising inventories, elevated input prices, and growing unemployment claims collectively signal an economy facing mounting internal friction. While tariffs aim to protect domestic industry, their uneven implementation and global ripple effects are starting to generate instability across both the production floor and the job market.

Source: Reuters

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Catherine Richards

Economic

In a recent development, U.S. President Donald Trump announced that all purchases of Iranian oil or petrochemical products must cease immediately. He warned that any country or individual that continues to buy from Iran would face secondary sanctions.

The President stated that those who violate this directive would be barred from doing business with the United States in any capacity. The announcement was made on Truth Social on Thursday.

This move comes after the U.S. postponed its latest round of talks with Iran regarding its nuclear program. The discussions were initially scheduled to take place in Rome on Saturday. A senior Iranian official revealed that the new date for the talks would be determined by the U.S. approach.

The Trump administration has been actively targeting Tehran with sanctions. These include measures against a China-based crude oil storage terminal and an independent refiner accused of participating in illegal oil and petrochemical trade.

In February, Trump reinstated a "maximum pressure" campaign against Iran. This initiative aims to reduce Iran’s oil exports to zero and prevent the development of a nuclear weapon by Tehran.

Secondary sanctions are a method by which one country punishes another for trading with a third country by denying access to its own market. This is a powerful tool for the U.S., given the size of its economy.

Analysts suggest that if the U.S. is serious about curbing Iran’s oil exports, it would need to impose secondary sanctions on entities facilitating the purchase of Iranian oil, such as Chinese banks. China is currently the largest buyer of Iranian crude oil.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Source: Investing

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Golden Gleam

Commodity

Economic

Gold triggered a bearish pennant pattern on Thursday, subsequently falling below potential support at the 20-Day MA before reaching an 11-day low of $3,201. It looks like gold will end the day below the 20-Day line as well, further confirming bearish sentiment. Sellers remain in control at the time of this writing as trading continues in the lower third of the day’s trading range and gold looks likely to close the session in a similar bearish position.

61.8% Fibonacci Retracement Completes at $3,104

Although the next potential support zone is around the 61.8% Fibonacci retracement of a short upswing at $3,104, the measuring objective from the pennant is somewhat lower – below a couple key potential support zones. That could be a sign that selling behavior may surprise to the downside. Nonetheless, it increases the chance that the higher support zone may be reached before the bearish correction is complete.

50-Day Moving Average at $3,080

Given the evidence of bearish momentum that returned today, it looks like the next potential support zone around the 61.8% retracement could be tested soon. If it fails to hold as support the next lower price zone identified on the chart is around $3,080 to $3,073, consisting of the 50-Day MA and the 78.6% Fibonacci retracement level at $3,073. Note that the 50-Day line is starting to rise above the 78.6% level.

Weekly Bearish Reversal Triggers

Not only was there a bearish signal on the daily chart, but also the weekly chart. A weekly bearish shooting star candle triggered today on a drop below last week’s low of $3,260. That is another bearish sign for crude oil. When both the daily and weekly charts line up as they did with the drop today, it indicates the potential for aggressive selling behavior as underlying demand falls off.

Pennant Pattern Points to $3,027

As noted above, the measuring objective for the bear pennant points to a potential lower target. It shows a target around $3,027. Although targets are one of the least reliable indications, the lower target points to increased downside risk for gold. Whether it is eventually reached or not, it is a bearish sign. Indications that gold was getting closer to unsustainable overbought conditions occurred with a bull breakout of a rising trend channel during the first half of April, that failed today. Gold fell back into the channel today on a drop below the top blue channel line.

Source: Kitco

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Manuel

Stocks

China–U.S. Trade War

The Nasdaq has recovered all of the losses sparked by President Donald Trump's "Liberation Day" tariff announcement on April 2.

The Nasdaq 100 plunged as much as 15% since the sky-high tariff announcement, but has since surged as much as 20% as the Trump administration rescinded some of the tariffs and instituted a 90-day pause.

Solid earnings results from Microsoft and Meta Platforms helped boost tech stocks even higher on Thursday. During their earnings calls, both companies hyped up AI tech and committed to making massive investments in AI infrastructure.

Shares of AI-related stocks boomed Thursday morning, with Nvidia up as much as 5%, and other names including Arista Networks, Vistra, CoreWeave, and Vertiv also surging.

The jump in tech shares helped indexes rally after a mixed day on Wednesday, following a slate of weak economic data.

Here's where major US indexes stood at about 11:10 a.m. ET:

S&P 500: 5,652.21, up 1.5%

Dow Jones Industrial Average: 41,053.19, up 0.93% (+376.35 points)

Nasdaq Composite: 17,895.36, up 2.6%

Meta raised capex guidance for 2025 to $64 billion to $72 billion from $60 billion to $65 billion, though higher costs due to tariffs could be playing a role in the increased guidance.

The jump in capex plans suggests that the AI infrastructure buildout isn't slowing down as had been feared in recent months following the release of the highly efficient DeepSeek model from a startup in China.

"We expect this significant infrastructure footprint we are building will not only help us meet the demands of our business in the near term, but also provide us an advantage in the quality and scale of AI services we can deliver," Meta Platforms CFO Susan Li said on the company's earnings call.

Wall Street analysts cheered the results. Bank of America reiterated its "Buy" rating for the stock on Thursday and raised its price target to $690 per share, a potential jump of 16% from Thursday's intraday high.

Meanwhile, Microsoft spent the bulk of its earnings call talking about the importance of AI and how it's helping grow its business across the cloud and enterprise software.

"Cloud and AI are the essential inputs for every business to expand output, reduce costs, and accelerate growth," Microsoft CEO Satya Nadella said.

Microsoft's Azure cloud business posted year-over-year revenue growth of 33%, of which about 16% was attributed to AI.

"The company is still doubling down on the AI monetization strategy within cloud," Wedbush analyst Dan Ives said in a note after Microsoft's earnings.

Microsoft reiterated its guidance to spend $80 billion in capital expenditures this year.

Source: Yahoo Finance

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Manuel

Commodity

In a bold declaration, former US President Donald Trump has announced that any country buying oil from Iran will be barred from doing business with the United States. This warning marks a sharp escalation in efforts to isolate Iran economically and diplomatically, sending strong signals to the global oil market.

The statement reflects the US’s ongoing strategy of using economic sanctions to deter countries from supporting Iran’s energy exports. Iran, a major oil producer, relies heavily on crude oil sales to fund its economy.

The move is expected to strain countries like China, India, and Turkey, which have previously imported Iranian oil despite US objections.

Impact on Global Markets and Foreign Policy

Trump’s warning could have wide-ranging consequences. Countries that rely on both Iranian oil and US trade may be forced to make difficult choices. For instance, allies in Europe and Asia might face pressure to cut energy ties with Tehran or risk damaging their trade relations with Washington.

Beyond trade, the announcement may raise tensions in the Middle East. Sanctions have historically led to increased instability in the region, with Iran responding aggressively to perceived threats to its sovereignty and economy.

Meanwhile, oil prices could spike if global supply tightens due to reduced Iranian exports. This uncertainty adds pressure on OPEC and non-OPEC oil producers to fill any potential gaps.

What This Means Going Forward

The future of Iran’s oil exports now largely hinges on how strictly the US enforces this policy and how other nations respond. With diplomatic relations already strained, further escalation could deepen divisions and impact global alliances.

Investors, policymakers, and energy companies around the world will be watching closely as the geopolitical tension unfolds. Whether Trump’s stance becomes official US policy again depends on future elections, but for now, the message is clear: trade with Iran, and you may lose access to the US market.

Source: Coinomedia

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Manuel

Stocks

China–U.S. Trade War

Apple on Thursday estimated tariffs will add about $900 million in costs to the quarter ending in June if rates do not change.

Apple shares were down 2.8% after the company released quarterly results.

While the results were better than analysts had expected, investors are focused on how tariff concerns will play out in the coming quarter.

The Cupertino, California-based company said its sales and profit for the fiscal second quarter ended March 29 were $95.36 billion and $1.65 per share, respectively, compared with analyst estimates of $94.68 billion and $1.63 per share, according to LSEG data. Sales of iPhones were $46.84 billion, compared with estimates of $46.17 billion, according to LSEG data.

Apple CEO Tim Cook said during a conference call that Apple saw "limited impact" from tariffs during the fiscal second quarter as the company shifted its supply chains and inventory.

But for the quarter ending in June, "assuming the current global tariff rates, policies and applications do not change for the balance of the quarter and no new tariffs are added, we estimate the impact to add $900 million to our cost," Cook told analysts on the call.

"The company's proposed manufacturing shift to India raises pressing questions about execution timeline, capacity limitations, and potentially unavoidable cost increases that will shrink margins, be passed to consumers, or have a mix of consequences," Emarketer analyst Jacob Bourne said.

The Trump administration has so far spared electronics from tariffs, but Washington has signaled that some levies could come in the weeks ahead. The uncertainty has sent shares of Apple, which makes 90% of its products in China, down about 15% this year, wiping off more than $600 billion from its market value.

Microsoft's upbeat forecast took its market capitalization to $3.2 trillion, beating Apple to clinch the top spot.

Apple will try to mitigate tariffs by shifting production of U.S.-bound iPhones to India, Reuters has reported. Analysts expect the company to spread some of the tariff costs through its supply chain, while keeping price increases to a minimum to avoid losing market share at a time when it faces fierce competition and has experienced delays in rolling out key artificial-intelligence features such as improvements to its Siri voice assistant.

Cook told Reuters on Thursday that iPhone inventory levels at the beginning and end of the fiscal second quarter were comparable, meaning there was no large inventory buildup over the period. Cook said handset sales were boosted by the iPhone 16e, the company's $599 mid-market model that contains its first-ever custom modem chip.

The iPhone 16 is Apple's most inexpensive model but has a sufficiently powerful processor to run all of the company's newest AI features.

"When you look at the active (iPhone) installed base, it did hit a new high, and did so in every geographic region," Cook told Reuters.

Apple said sales in its Greater China segment fell to $16 billion, better than analyst expectations of $15.9 billion, according to data from Visible Alpha. In China, Apple has faced especially tough competition from domestic makers such as Huawei and Xiaomi and has not yet rolled out key AI features that were announced nearly a year ago.

Reuters earlier reported that Apple has partnered with Alibaba to provide AI features in China, but Apple has still not signaled when those features will become available.

Apple said sales in its services business were $26.65 billion, compared with estimates of $26.69 billion, according to LSEG data. Cook told Reuters that Apple now has more than 1 billion paid subscriptions on its platform.

In Apple's accessories and wearables segment, which includes products such as AirPods, revenue was $7.52 billion, compared with estimates of $7.85 billion, according to LSEG.

Sales of iPads and Macs were $6.40 billion and $7.95 billion, respectively, compared with analyst expectations of $6.07 billion and $7.92 billion. Cook said that entry-level iPads performed the best during the quarter.

Apple also said it will increase its cash dividend by 4% to 26 cents per share and that its board has authorized an additional $100 billion for its stock buyback program.