Donald Trump's tariffs have done to global stock markets what his good friend Narendra's demonetisation did to the Indian economy and the US President has also reacted to the consequences of his action with language similar to his good friend.
“I don’t want anything to go down, but sometimes you have to take medicine to fix something," Trump was quoted as saying when asked about the global market crash as he returned from a weekend of golf in Florida.
Prime Minister Modi had defended his demonetisation in the Lok Sabha in 2017 by saying: “When can you have an operation? When the body is healthy. The economy was doing well and thus our decision was taken at the right time."
The Prime Minister's defence had come months after November 8, 2016, when he cancelled 86 per cent of India’s currency (Rs 500 and Rs 1,000 notes) in what was billed as an attempt to clean out black money and counterfeit notes. Almost all the money returned to the banks, causing the black money logic to fall on its face.
On the same day, Trump had defeated Hillary Clinton to become the President of the United States for his first term.
Trump's tariff moves this time have upended the global economic world much like demonetisation did to the Indian economy.
Trump said he had spoken to leaders from Europe and Asia over the weekend who tried to convince him to lower tariffs – some as high as 50 per cent – that are due to kick in this week.
"They are coming to the table. They want to talk but there's no talk unless they pay us a lot of money on a yearly basis," Trump told reporters.
In 2016, Modi had also hoped that the country would emerge successful from the note ban.
"Let us ignore the temporary hardship... I am confident in the 125 crore people of India, and I am sure the country will get success," he had said in his demonetisation speech.
The full impact of the two tough leaders’ tough decisions are, of course, being borne by the people.
Billionaire fund manager Bill Ackman, who had endorsed Trump's run for President, has called for the tariffs to be paused to avert an "economic nuclear war".
Two weeks after demonetisation, former prime minister Manmohan Singh had called demonetisation "a monumental management failure" and a case of "organised loot and legalised plunder of the common people."
The esteemed economist had predicted that India's GDP would fall by 2 percentage points. It came true during the April-June 2017 quarter.
Many economists argue that the Indian economy has never really recovered from the demonetisation blow.
What will Trump's tariffs do to the world?
Economists at JP Morgan estimate that tariffs will see full-year US GDP decline by 0.3 per cent, down from an earlier estimate of 1.3 per cent growth.
Booth JP Morgan and Goldman Sachs now see a heightened risk of a global recession. JP Morgan estimates it at 60 per cent while Goldman Sachs pegs it at 45 per cent.
