This tariff business has got the whole world in a twist. President Donald Trump vowed to impose reciprocal tariffs on countries which have an advantageous tariff equation against the United States. An auspicious date in April was earmarked for the new tariff regime to kick in. Not for nothing did the poet laureate T.S. Eliot declare that ‘April is the cruellest month’ in his seminal poem, The Waste Land.
Trump has been as good as his word. Financial and economic pundits world over are expressing learned opinions in print, tv and social media. Here in India, boffins from the finance, commerce ministries must be working overtime to understand the full implications of Trump’s tariff salvo and to figure out how best to minimise the deleterious effects it may be having on our economy and on Dalal Street.
Much of what’s being discussed tends to sail over my head. I am one whose primary and admittedly selfish interest is to keep my eyes peeled on how the stock markets are behaving and what likely impact the President’s unilateral actions may or may, not have, on my own portfolio. As I put this blog to bed, markets worldwide are plunging with Trump’s home country leading the way in pursuing bears. Not a bull to be seen anywhere on the horizon. Having wagered my meagre nest egg on bank fixed deposits and cautiously on market related mutual funds, I needed to understand a bit more about the subject. Accordingly, I invited my portfolio manager home for a chat.
The strange thing about portfolio managers is that they always smile from ear to ear. Now and then, when markets perk up and they have reason to display a sunny disposition. However, when the Sensex and Nifty are tanking, it beats me why fund guardians look like they have won the lottery. Anyhow, I welcomed my consultant whose demeanour suggested that the Sensex was on a bull run and not, as was the case, being hounded by angry bears.
‘Sir and how are we today?’ he began cheerfully.
‘You tell me. Markets are going south so fast the authorities might have to apply circuit breakers.’
‘No cause for alarm, Sir. Your portfolio comprises blue chip, large and mid-cap stocks which have been marginally affected. At current levels, the markets are most attractive for fresh investments and that’s why I have come with some outstanding proposals for you.’
I have to hand it to him. Here I am apprehending doom and disaster, and this young investment wizard is displaying a sangfroid I could not have believed possible. Before I could challenge him on what I felt was his misplaced optimism, the young wiz continued.
‘You have to take the long-term view, Sir. I have it on excellent authority that India is on a featherbed of a wicket as far as our relations with the US are concerned. Tulsi Gabbard is almost a Hindu, Kash Patel is a Gujju, Vivek Ramaswamy Tam Bram and Trump loves them all. Ergo he loves India and Modi. The 27 percent tariff levy on India has already been reduced to 26 percent. More concessions are on the way.’
‘Listen my friend, let me put you straight on one or two vital issues. This tired, old advice of taking the long-term view is all very well if you are talking to a 30 or 40-year-old. I am in my 70s and my long-term vision can only be viewed from the rear-view mirror. It is decidedly in the past. I am willing to listen to plans that can safeguard my savings over the next three to five years. Capiche? Kemo sabe?
‘Sorry Sir, I didn’t quite catch that.’
‘Of course, you didn’t. Never heard of Lone Ranger and Tonto? Let’s get back to business? Tell me exactly why I shouldn’t panic over this tariff tamasha when even the natives in Cocos (Keeling), Christmas, Heard, McDonald and Norfolk Islands are having kittens over Trump’s tariff tantrums? In other words, no place on earth is safe.’
“Sir you have every right to feel jittery, but I am here to apply soothing balm. In one week, the markets will recover all its losses and you will be smiling again. You have wisely invested for many years and have seen many ups and downs. You have booked profits on several occasions, bear that in mind. The experts say that India has played Trump’s tariff game very smartly.’
‘I can’t say I am entirely convinced by your explanations. We will conclude our meeting here.’
My ears might have been playing tricks with me but I distinctly thought I heard the young man breaking into a few snatches from that 60s Tom Jones hit on his way out. Smile away your blues / And let the sun come shining through / Laugh and you will see / You could be happy with me / All you gotta do is smile / And the world smiles too.
My heart went out to him.