Can India capitalise on the China-US trade war?

Aakanksha Shrawan 22nd August 2018

A lot has been written about the China-US trade war that has been going on for the better part of this year. US President Donald Trump announced in his campaign that he would return prosperity to the US Rust Belt that has been “stolen” by China. As a first measure, on January 22, the US levied safeguard tariffs on residential washing machines, solar cells, and modules. Although these tariffs were levied on imported items from all over the world, China was the major target. This led to a spiraling rise in the tariffs imposed by both China and the US which has steadily escalated into a trade war. While the US initially imposed tariffs on $50 billion worth of Chinese imports, it has further increased tariffs which now target around $450 billion of Chinese exports to the US. Although China doesn’t import such a vast universe of goods from the US, it still imposed tariffs on US imports, mainly the agricultural products of the US, and these constituents had voted predominantly for Mr. Trump during the past election.

While these retaliatory tariffs are going to hurt both producers and consumers in China and the US, this tit-for-tat rise in tariffs is bound to have a ripple effect on other nations’ economies, especially emerging and export-dependent ones. In particular, there is one line of thought that believes that India can seize this opportunity and enter segments such as textiles and garments along with ge...

Note: Views expressed in this blog are those of the author.