India may not be directly affected if a global trade war erupts but of greater impact on its economy may be second-order effects such as surge in commodity prices, McKinsey’s global CEO Kevin Sneader told Vinod Mahanta and Sachin Dave in Mumbai. In his first media interview after taking over at McKinsey on July 1, Sneader also spoke about the consultant’s entanglement in the South Africa corruption scandal related to the Gupta family. “We made mistakes that we should apologise for. The governance process didn’t work well enough. It’s a partnership failure,” he said. Edited excerpts:
We are in an unprecedented period of synchronous growth; the whole world is growing. IMF had a forecast of 3.5% growth in January, revised to 3.7% in April.
That would mean tariffs on nearly half of China’s exports to the US and that’s a big issue. At the moment we aren’t in one but we definitely are on the brink of a trade war.
I’m not going to pretend to understand the fear of personalities and how they see their ability to win.
We know trade is a key determinant of many aspects of living standards. And if it starts to get serious and we start seeing real restrictions in the flow of goods and services, that will have a major effect. We’re already seeing what’s happening to the price of commodities with the prospect of tariffs coming on those and that will not be good for manufacturers and the global economy.
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