20 MARCH, 2025
Who: Charles Darwin University Associate Professor in Accounting and Finance Rakesh Gupta.
Topics:
- Global economic powers
- Stock markets, market efficiency and international finance and investments
Contact details: Call +61 8 8946 6721 or email [email protected] to arrange an interview.
Quotes attributable to Associate Professor Rakesh Gupta:
"Trade war is form of economic conflict caused by a state (country) with a view to protect local businesses and producers.
“The current trade war is aimed at exerting dominance and or bargaining chip initiated by the President of the United States.
“A trade war triggered by the United States, unless settled quickly, will flow on to other countries. First, there will be retaliatory tariffs as we have seen Ottawa (Canada) impose 25 per cent tariffs. Similarly, China has also done targeted tariffs on US goods. China has also put Google on notice. This has a potential for further cascading effect.
"A significant point to consider is that currently the USA exports high value-added goods and services and imports low value-added goods and services.
“Tariffs can be seen as additional taxes on goods. For example, when we see higher taxes on beer, a glass of beer becomes more expenses at the bar. Similarly, tariffs on imported goods will mean these goods will become more expensive. In the longer term this may mean that domestic production will pick up and provide employment locally and domestic goods supply may increase. However, this reduces competition globally and in the short-term benefits government revenue.
“A trade war, or any war for that matter, increases risk and uncertainty in the marketplace. An immediate impact is the decline in stock market we have seen in last two or three weeks. In the longer term, continuing trade war causes business and investor sentiment to decline, resulting in people investing less. This will cause overall economy to fall.
“My belief is Trump’s trade war is his way of international diplomacy, his model of disruptive politics. It is his style of taking an extreme or impossible position and giving the impression that he doesn’t care. This is like a game of ‘who blinks first’. He is using this as bargaining chip. I hope I am right, and the United States enters a ‘deal’ with China, Mexico and Canada. However, I sometimes do worry that he may misjudge his opponent and push them too far, from where it may not be possible to arrive at a compromise.”
Contact details:
Raphaella Saroukos she/her
Research Communications Officer
Marketing, Media & Communications
Larrakia Country
T: +61 8 8946 6721
M: 0427 895 533
E: [email protected]
W: cdu.edu.au
