Tesla’s Gain, America’s Loss

JANUS VIEW

The Butterfly Effect Of Donald Trump’s Tariffs 

When a butterfly flaps its wings, it could cause a tornado someplace else, suggested MIT meteorologist Edward Lorenz 50 years ago, after noting that rounding off a number to three decimal places, in the computer model of 12 parameters he was running to forecast weather patterns over the next two months, produced a result vastly different from the one he had got when he used the full number running to six decimal places. What Lorenz failed to foresee was that if the insect flapping its wings was situated in the White House, the chaotic effect would be magnified many times over. Initial conditions really do matter.

US president Donald Trump has announced he would slap 25% tariffs on imports from any country that buys Venezuelan oil. Reliance in India has developed an allergy to the sour crude from Venezuela. Trump has announced a 25% import duty on imports of automobiles and auto-components from any country. Before anyone starts dumping Tata Motors stocks, given the lower likely US sales of Jaguar and Land Rover vehicles from the Tata Motors stable, they should consider the possibility that Trump could roll this duty back or put it in abeyance. American automobile producers have an integrated North American supply chain, spanning Mexico, the US and Canada. The duty would make cars more expensive, across the board.

Who’s The Biggest Loser?

The New York Times explained this, taking the example of three SUVs, the Chevrolet Blazer, imported from Mexico, the Toyota RAV4, imported from Canada and the Nissan Rogue, assembled in the US. The value added in the US/Canada was the lowest for the Rogue assembled in the US, and the highest for the Blazer, imported from Mexico. Disassembling and reconfiguring this supply chain to manufacture everything in the US would be costly in itself, and would forgo the comparative advantage benefits embedded in the current sourcing pattern. The loser would be the average American, not just the new car buyer, but also those who carry on with old jalopies that need regular infusions of new parts. The only gainer would be Tesla, which has the least foreign-produced content. Battery inputs are unlikely to be classified as auto parts. However, this American gain for Tesla comes in the wake of bad news for it from the rest of the world.

Meanwhile, in the Middle East, Israeli missiles have blown to smithereens the myth wantonly peddled to the world’s media that Trump the Peacemaker was responsible for the recent break in the war on Gaza that Israel has been waging since October 2023. 

MESSAGE FROM MASTERS INDIA

Simplifying GST for Large Enterprises

Masters India is one of the biggest GST Suvidha Providers (GSP) under Goods and Services Tax Network (GSTN). Through our advanced solutions our mission is to assist businesses simplify their required compliance and workloads. We create smart compliance automation tools to help businesses simplify their compliance activities and run their operations more effectively. Join us as we continue to innovate and deliver actionable insights, strategic tools, and exceptional support to help enterprises stay ahead in the ever-evolving financial landscape.

Visit Masters India for more information.

Rs 98 trillion

That’s the combined wealth of India’s 284 billionaires, according to the Hurun Global Rich List 2025—equal to roughly one-third of India’s GDP and more than Saudi Arabia’s entire economy. India added 13 new billionaires this year, solidifying its spot as the world’s third-largest billionaire hub. Mukesh Ambani leads the pack with Rs 8.6 trillion, just ahead of Gautam Adani at Rs 8.4 trillion. Mumbai remains the billionaire capital of India, though Shanghai has now overtaken it in Asia. The average Indian billionaire is 68 years old and holds Rs 34,514 crore in wealth.

—🏠 Sales Slump, Prices Soar. India’s housing market lost steam in Q1 2025, with sales in the top seven cities plunging 28% to 93,280 units, according to an Anarock report. Rising costs and low demand for entry-level homes are driving up unsold inventory and pushing small players out of business. MMR and Pune make up 51% of sales while Hyderabad saw the steepest drop at 49%. New launches dipped 10% to 1,00,020 units. Unsold inventory dropped 4%, though Bengaluru’s inventory jumped 28%. Prices surged 10-34%, driven by luxury supply. Small developers are struggling, some merging with larger firms as costs rise and demand shifts.

—🍕 Pizzas Galore. Domino’s Pizza operator in India, Jubilant Foodworks, is planning to bring its store count in the country up to 3,000 in the next three years. This will include pizza brand dominies and fried chicken brand Popeyes. PTI reported the CEO and managing director Sameer Khetarpal as saying the focus will be on Popeyes. This comes even as higher wage and raw material costs dented margins and drove Jubilant’s profits to drop by 35% in Q3 FY2025, despite an increase in revenue by 56%.

—🚨 Crackdown continues! The Bureau of Indian Standards has continued to raid warehouses of e-commerce giants, including Amazon and a Flipkart subsidiary. On Wednesday, according to a press release, it seized uncertified products worth Rs 70 lakhs in Delhi. This is a continuation of such raids in other parts of the country, which the bureau said were to enforce compliance with quality standards. “In the last one month, the BIS team has conducted similar operations in different parts of the country and seized various substandard items in Delhi, Gurgaon, Faridabad, Lucknow, and Sriperumbudur,” the press release said. 

– 🧳🇺🇸 American Dream In Jeopardy? The US Embassy in India canceled around 2,000 visa appointments, citing potential fraudulent behavior in the visa application process. A Business Standard report said the embassy is actively cracking down on fraud in visa applications by tracking IPs of shady applicants and visa consultancies. The police investigation has named over 30 individuals, predominantly from Punjab and Haryana.

PODCAST

On Episode 542 of The Core Report, financial journalist Govindraj Ethiraj talks to Ajay Bagga, veteran investor and market analyst as well as Ajay Srivastava, Founder of Global Trade Research Initiative.

1. Markets survive a fresh volley of tariff fire.

2. How FIIs continue to drive sentiment and price movements.

3. Goldman raises its year end gold price target to $3,300.

4. India is now facing tariff impact on auto, auto components, steel and aluminium from the US. What’s next?

5. Indian media and entertainment industry revenues fell 3% last year even as digital Digital advertising in 2024 grew 17 per cent to Rs 70,000 crore, which was 55 per cent of total.

👥 THE TEAM

✍️ Zinal Dedhia, Salman SH, Kudrat Wadhwa | ✂️ Rohini Chatterji | 🎧 Joshua Thomas