Donald trump's trade tariff threats are setting off concerns on global supply chains.

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The supply logistics have already been distorted. First by the pandemic and then by the wars in west Asia and on the edge of Europe.

Trump's attitude towards China is not new, but he has threatened India with reciprocal tariffs.

Tariffs are a central part of trump's economic vision. He sees them as a way of growing the US Economy, protecting jobs and raising tax revenue.

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The mere threat of trump's universal tariffs is adding to concerns that global supply chains will endure more bottlenecks.

Countries and companies are taking preventative measures.

However, there is no assurance, the approaches that helped weather the trade war during trump's first term will be effective this time around.

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What the tariffs under trump 2.0 mean?

Trump has threatened to slap a tariff of 10 per cent on global imports into the US. He has pledged to impose 25 per cent tariffs on all imports from Mexico and Canada.

Trump warned of 60 per cent tax on goods from China.

Most economists tell us that tariffs are a messy business, which usually results in the consumer paying the price.

Beijing is taking measures to impose its own retaliatory plans to force Washington to negotiate and avoid a full-scale trade war.

Drawing on lessons learnt from the last trade war during trump's first term, China is attempting to gather bargaining power.

HSBC's Chief Asia economist Fred Neumann said, "We have to look at this as the opening bid in what will likely ultimately turn into a negotiation with the US Rather than just an imposition of tariffs and everyone walks away."

Beijing, though, is worried that further tariffs will hurt its already shaky economy.

A new trade war with the US Would still hurt China more.

After the tariff threat on Chinese goods, market observers noticed that funds were already moving into India and Japan.

Veteran emerging-market investor mark mobius said, "Supply chains have been moving away from China, and that helps not only Japan and India but also other countries, particularly in southeast Asia."
He said, "India is the big beneficiary since only India’s workforce can match the Chinese in numbers and labour costs."

He added, "With trump maintaining or even extending trade restrictions on China, this will be positive for India."

However, trump has threatened India with reciprocal tariffs.

Trump warned of a tit-for-tat strategy if India continued its high tariffs, which include a 100 percent charge on some US Exports.

The president-elect said, "I’ve always said, if they tax us, we tax them the same amount."

He added, "the word reciprocal is important because if somebody charges us – India, we don't have to talk about our own – if India charges us 100 per cent, do we charge them nothing for the same?"

However, trump's policies are broadly expected to bring inflation rearing its ugly head all over again.

(With inputs from the agencies)