“Liberation Day” update: Desperately seeking silver linings

Written by: Aarthi Ramnath, Raghav Bikhchandani & Yash Budhwar

“Liberation Day” update: Desperately seeking silver linings

Donald Trump is unrepentant about unleashing mayhem on the world—and America’s own stock markets. The Dow fell 1,679 points, or 3.98%. The broader S&P 500 was down by 4.84% and the tech-heavy Nasdaq plunged 5.97%. All three major indexes posted their biggest single-day drop since 2020. The extent and size of the tariff hike took Wall Street by surprise—after months of telling themselves ‘it’s just Trump talk’:

Across Wall Street, money managers, brokers and bankers were reeling from what many described as an unprecedented shock, and fearing it marked an end to the market’s post-Covid rally. They might have lived through much bigger market swings, but this one—induced by a U.S. president bent on establishing a new paradigm for global trade, at the expense of rivals and allies alike—felt incomparable because it was the result of deliberate policy.

OTOH, silver lining #1: Other global markets—including Europe’s benchmark STOXX 600 index and Japan’s Nikkei 225 index—also slumped. But the Indian stock indices slid by a mere 0.40%—despite a hefty 27% tariff hike on Indian goods. More on the reasons for optimism later.

What’s with that number? Indian experts were braced for punishment, but the number took many by surprise. The reason: The White House changed its formula. Trump repeatedly claimed the tariffs would be reciprocal—but, but, but:

The very first statement of the US Trade Representative memo on this calculation states the following: “Reciprocal tariffs are calculated as the tariff rate necessary to balance bilateral trade deficits between the US and each of our trading partners.” This is fundamentally different from saying that the US will impose tariffs that will equal the other country’s tariffs. Instead, what the US seemingly wants from these tariffs is to raise them to a level where the trade balances out — it is not as concerned with the actual level of tariffs imposed against it but with using tariffs to wipe out its trade deficit.

We had a $46 billion trade surplus with the US in 2024—accounting for 1.2% of GDP. The US is also India's top export destination—accounting for 18% of the pie. So that’s certainly not good news.

OTOH, silver lining #2: Trump has spared two sectors critical to Indian exports to the US: pharmaceuticals (generic drugs) and auto parts. A third of our pharmaceutical exports ship to the US—making close to $9 billion in sales

Zero retaliation policy: A number of US allies have promised to reciprocate in kind. Example: Ursula von der Leyen, the European Commission president, said: “If you take on one of us, you take on all of us.” And China—hit with an overall 54% hike—vowed to “safeguard its own rights and interests.” But many have held their fire—including Britain, Australia and India. New Delhi’s cautious response went something like this:

India's trade department is "carefully examining the implications" of the U.S. announcement and also holding talks with Indian industry and exporters on their assessment of the tariffs, a trade ministry statement said. "The department is also studying the opportunities that may arise due to this new development in U.S. trade policy," it said, and referred to the agreement.. to work on the first phase of a trade deal by autumn 2025.

The harsher truth is that the tariffs will slow the Indian economy—trade deals or not. Experts predict the growth rate will drop to anywhere between 6% and 5.6%.

OTOH, silver lining #3: The tariffs slapped on India—27%—is way lower than those on its trade rivals like China, Vietnam or Bangladesh:

Start with apparel. These are not products the US is likely to reshore because American wages are too high to be globally competitive. India has an edge. Tariffs on exports to the US will be 27% for India, compared to 54% for China, 46% for Vietnam, 37% for Bangladesh, and 32% for Indonesia. As long as the US continues to import apparel, Indian exporters will experience a competitive advantage. This will be true for other unskilled labour-intensive exports.

So yes, meat and seafood are casualties of the Trump assault on the world order—but the garment business in Tiruppur has cause for hope. Yes, the tech biz—be it chips or smartphones—have lost their zero-duty status. But India may still be cheaper for, say, Apple compared to Vietnam.

But, but, but: None of this factors in Trump’s response to such ‘adjustments’ in offshore manufacturing—since his primary aim is to “bring the jobs home.” And no good will come of a trade war that cripples the global economy—even if we choose to stay on the sidelines.

The final silver lining: A number of free market experts view the Trump tariffs wars as a golden opportunity to bring down trade barriers—and stop protecting inefficient Indian businesses. India is among the most protected economies in the world. Our average tariff rate “towers above those of other major economies”—at 17% in 2023 compared with just 3.3% in the US.

But, but, but: The US and the EU have long pressured New Delhi to drop protections for our agricultural sector—where the simple average tariff rate is even higher—at 39%, almost 8X that of the US. But dropping those trade barriers will be devastating for farming—which is responsible for nearly half the country’s employment. No Indian government can afford to throw farmers under the bus—and it could become a sticking point for any bilateral trade agreement with the US (or the EU).

We’ll leave you with our fave silver lining—this meme :)

Reading list: Bloomberg News (login required) has two pieces—one on the history and background to India’s trade relationship with the US and the other on how this epochal trade moment can be an opportunity for us. Also read: this Indian Express op-ed by Shoumitro Chatterjee that makes a case for lowering trade barriers. The Telegraph and Mint offer a range of expert views on the impact. New York Times explains how Trump totally screwed South East Asia—and the US companies that worked hard to move their operations out of China to Vietnam etc.

Nithyananda’s new move: Land grab in Bolivia

The context: The disgraced ‘swami’ fled India to safer shores to dodge charges of rape, torture and child abuse. He then declared himself the ruler of a non-existent country—the United States of Kailasa. Back in 2023, Nithyananda even conned a New Jersey mayor into making Newark the sister city of Kailasa.

What happened now: The actual location of this nation has always been a mystery—claimed to be “in the Andean region.” This may be the only Nithyananda claim that is true. An investigation by a Bolivian newspaper El Deber revealed that the Kailasans have been signing land deals with Indigenous groups in the Amazon. These hucksters moved in after wildfires devastated the rainforests—promising help. Of course, it was all a scam:

The conversations eventually turned to a lease of land three times the size of New Delhi, and the Baure agreed to a 25-year deal that would supposedly have paid them nearly $200,000 annually. But when the Kailasa representatives came back with a draft in English, it covered 1,000 years and included the use of air space and the extraction of natural resources.

Indigenous leaders—conned into thinking the money would be used to conserve their land—signed these insane deals.

The good news: Happily, the Bolivian government has finally swung into action—and arrested 20 Kailasans—accusing them of “land trafficking.” The agreements have been cancelled and they have been deported to their home countries—including India, the United States, Sweden and China—sadly, not to Kailasa. Also sad: Nithyananda isn’t among them. (New York Times)

What is ‘QatarGate,’ the latest furor embroiling Israel?

Even as he again pummels Gaza to death (literally), Bibi Netanyahu is embroiled in a new political scandal—and it involves Doha?! Earlier this week, two of his aides were arrested for allegedly peddling positive PR for Qatar—at the expense of Egypt:

Court documents show that Yonatan and Feldstein are suspected by prosecutors to have taken bribes and “worked to transfer messages to journalists in a manner that presented sympathetic articles about Qatar in the media, minimizing Egypt’s role as a fair mediator in the deal, while dictating the media agenda.”

Btw, the publications involved included big names like Jerusalem Post.

Historical point to note: Back in 2023, the same Bibi turned a blind eye to Doha’s political and financial support to Hamas:

Prime Minister Benjamin Netanyahu “took an approach that divided power between the Gaza Strip and the West Bank – bringing Palestinian Authority President Mahmoud Abbas to his knees while making moves that propped up the Hamas terror group”. Furthermore, “most of the time, Israeli policy was to treat the Palestinian Authority as a burden and Hamas as an asset.”

The main takeaway: This is being framed as a Bibi problem—he fired the attorney general and security chief to kill the investigation. But the greater tragedy is that it reveals the rot in the Doha ceasefire negotiations—which will determine the future of Palestinians. Even their Arab interlocutors cannot be trusted. (CNN)

Run free: Meet the Bear Grylls of dogs

The context: Back in November 2023, Valerie—a one-year-old dachshund—was on a camping vacation on a remote island in Australia. On day two, the lil’ sausage dog escaped her playpen area—and hid under a car. When good samaritans tried to catch her, she got spooked and ran into the forest.

What happened now: Valerie has been spotted alive—with her pink collar intact—about 10 miles from where she disappeared. But she remains elusive as ever—despite best efforts to entice her with roast chicken and tuna. Wildlife experts are astonished that this tiny pooch has managed to survive in the wild for 1.5 years—in an area that’s home to at least two venomous snake species and predatory wedge-tailed eagles.

Some experts suggested Valerie may have received help from people on the island, but Prof Paul McGreevy, of the University of Sydney’s veterinary school, said dachshunds, like all dogs, were “extremely resourceful.. Dogs are the greatest opportunists in the animal kingdom: that’s one of their core skills,” he said.

Besides, everyone knows that dachshunds are “tireless hounds” and “independent hunter[s] of dangerous prey.” All hail Valerie—queen of the Australian jungle! You can admire her awesomeness below. (Yes, this is a very silly and very necessary story at a time when the world is going to hell.) (Smithsonian Magazine)

Support this sanctuary: An important appeal for Bangalore’s dogs

As you well know, we are mad about animals over here at splainer—-so the shout-out for this fundraiser means a lot to us. Established in September 2024, Goodoo is an animal welfare organisation that is dedicated to rescuing, treating, releasing and rehoming injured, abused and abandoned dogs in the Bangalore area.

The organisation is currently over halfway short of its modest Rs 5 lakh goal—needed to build the inaugural shelter space for dogs. Every little bit of financial contribution counts—so please head over to Goodoo’s Milaap page if you can.

PS: One of the board members is Chitra Raghavan—who is a splainer subscriber and legal advisor from our very inception. So we have full faith in Goodoo’s integrity.

what caught our eye

business & tech

While we all innocently enjoyed living in the Ghibli universe thanks to ChatGPT’s new AI image generator, Axios warns that the tool makes it easier for scammers to generate better fake documents.
If scammers don’t spell doom day, this definitely will. Wired warns of the incoming quantum apocalypse called the Q-Day—hackers will be able to use quantum computers to cause massive data and privacy breach.
British startup Pulsar Fusion has unveiled Sunbird—“a space rocket concept designed to meet spacecraft in orbit, attach to them, and carry them to their destination at breakneck speed using nuclear fusion.” Theoretically, the rcoket could cut journey time to Mars in half.
Physicists have released plans for Future Circular Collider—an even bigger atom smasher to address the mysteries of physics.
Microsoft may be hitting pause on its AI dreams—halting or delaying data center projects across the globe in a pullback.

sports & entertainment

V for Vaibhav, Venkatesh and victory—KKR got the pitch they wanted at Eden and made it count, crushing SRH by 80 runs to get their campaign back on track.
The ‘Empuraan’ controversy has crossed borders to Tamil Nadu—with TN politicians demanding another cut as they've taken offence to a subplot in the film.
Variety has a feature on Indian-Canadian film director Deepa Mehta—best known for her “Elements trilogy”—‘Fire’ (1996), ‘Earth’ (1998) and ‘Water’ (2005).
Mark your calendars—the fourth season of ‘Panchayat’ will drop on July 2.
Four-time Olympic champion Michael Johnson hopes the new league he’s spearheading—Grand Slam Track in Kingston, Jamaica—helps financially struggling track athletes.
Bruce Springsteen is dropping seven “lost” albums this June—83 tracks from 1983 to 2018, including 74 never released before, some of them already mixed and ready to go back in the day.

health & environment

Male fruit flies booze it up to boost their sex appeal—turns out a shot of ethanol cranks up their pheromones and makes them irresistible to the ladies.

Experiencing period pain? Just eat some raw carrots! USA Today explains how it works.
Mint (splainer gift link) has the story on the internet’s favourite pets—the axolotl—which is hurtling toward extinction.
A large study has found that shingles vaccine can be linked to reducing the risk of dementia by 20%.
In related news: Researchers have found that widowed, divorced, and never-married older adults had a lower dementia risk.

meanwhile, in the world

At least 33 Palestinians—including 18 children—were killed after Israeli airstrikes hit three Gaza schools sheltering displaced families, with over 100 more injured in the attacks.
Myanmar military have declared a temporary ceasefire (see: our Big Story for context on the civil war) to facilitate relief efforts following the earthquake that killed more than 3,000 people (explained here).
Four people have revealed Trump’s National security adviser Mike Waltz is addicted to creating Signal group chats and has made at least 20 to discuss sensitive information.
Hungary announced its plans to pull out of the International Criminal Court—just hours after Bibi—who has an international arrest warrant—visited the country.
While digging up a football field in Vienna, workers stumbled on a mass grave with over 129 skeletons—warriors now understood to be likely killed in a bloody first-century battle, marking the region’s first known clash.
Following the US, Germany is now deporting pro-Palestine EU citizens.
Speaking of deportations, Pro Publica has an insider’s look into ICE’s deportation flights from the eyes of flight attendants.

meanwhile, in India

After a 14-hour marathon debate that ran past 2:30 am, the Rajya Sabha cleared the Waqf Amendment Bill with 128 votes in favour and 95 against.
Shubhanshu Shukla is set to make history in May 2025—becoming the first Indian to reach the ISS and the first Indian in space in 40 years.
The Supreme Court has stayed the felling of trees in Hyderabad’s Kancha Gachibowli forest area—amid widespread protests by students.
Shubhanshu Shukla is set to become the first ISRO astronaut aboard the International Space Station (ISS), as part of the private astronaut mission Ax-4.
The Print has a must-read on how deep nepo babies run in India’s Supreme Court—with 60% coming from lawyer or judge families.

One presidential thing to see

Children posing for pics under the cherry blossoms in front of the Washington Monument were photobombed… by Barack Obama! US presidents—always in the wrong place at the wrong time. (Washington Post)