A “trade war” triggered by the US 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, etc, 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 ...