Trade war is a lose-lose situation, can push entire world into recession

India's domestic economy could also suffer some ill-effects without necessarily triggering retaliation via higher tariff barriers against Indian goods

A "trade war" triggered by the United States could be a defining factor that retards growth across the globe. Donald Trump proposes to impose a 25 per cent customs tariff on steel imports and a 10 per cent tariff on aluminium. In retaliation, the European Union (EU), Canada, Brazil, China, among others, have threatened to impose customs duties on US exports. In the meantime, India's budget has imposed higher customs duties on a variety of items, though this hasn't invited retaliatory action as of yet.

Protectionism of this nature creates lose-lose situations. For example, while there could be jobs created