While the numbers in WTO’s projections might vary depending on how the US and other countries deal with each other, the uncertainty in global trade outlook is unlikely to go anytime soon. Trump’s tariffs, the WTO has said, will also generate headwinds for trade in services. Services directly linked to merchandise trade such as transportation will take a bigger hit, but even other areas, including digitally delivered services, will suffer. India is a major player in the latter and any serious slowdown will have implications for employment and foreign exchange earnings for the Indian economy.

Will Trump’s trade war with China open opportunities for other countries? To draw this conclusion alone would amount to only looking at the bright side of the picture, the WTO suggests. Tailwinds from exporting to the US to replace Chinese supplies will face headwinds of the possibility of Chinese exports flooding non-US markets. This will also hold for Asia excluding China — the closest geographical classification to India in the report — the WTO has said. Economies such as India have already been concerned about Chinese overcapacity and the potential implications of China dumping these products at lower prices. A pragmatic assessment demands that these concerns will escalate.

What does all this mean as far as policy course for India is concerned? One, this disruption should be seen as a global shock rather than some new zero-sum game to India’s advantage. Two, dealing with the US is going to be important but only one part of the current challenge.