Tariffs, he noted, are just one small part of the broader economic agenda. The key goals are lowering taxes, reducing regulations, and encouraging investment in the US by protecting businesses from unfair competition. He said, “The tariffs [are] but a minor player in those elements.”
Lee stated that the weakness in the US dollar and the turbulence in the treasury market are not signs of declining global faith in US assets but rather the result of large-scale margin calls.As leveraged investors faced steep stock market losses, they were forced to sell the most liquid assets—US Treasuries and the dollar—to cover their positions. “What do you do when you have a margin call? You sell the most liquid assets you have on hand,” he said.
This dislocation has led to a freeze in global portfolio diversification, especially into emerging markets like India. But Lee believes this is temporary. Once the deleveraging phase stabilises, fund flows into emerging economies could resume, driven by the need for diversification and growth.Also Read: India is well placed amid tariff tensions, but still not cheap: Adrian Mowat
Lee believes domestic politics in both US and China are stalling progress. “There’s just no way that President Xi is going to look to anyone like he’s being pushed around by an American president,” he said.
Also Read: Nomura expects RBI to cut rates in April, but Fed may wait until December
On the European Union (EU), Lee dismissed the “zero tariffs for zero tariffs” proposal as unserious, pointing out that non-tariff barriers like legal hurdles and strict regulations are the real issue. He stated that the EU has mastered these methods to protect its markets and that real negotiations will only begin when they are ready to open up meaningfully.
For the entire interview, watch the accompanying video
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