IMPACT F WORSENING RETAIN OF CHINA-US ON INDIA

The two countries China – USA are locked in what began as a conflict over trade and
tariffs, but has now become all-consuming and is affecting their relationship across the
board. It has also affected the Investors sentiment and business confidence the
investors are finding it hard to invest in China. How it will benefit India?
Before running for President Trump tweeted that “China is neither ally nor a friend
they want to beat us and our country” This was his first tweet against China’s trade.
The second time he stated about was in his Presidential campaign which was held on
May 2, 2016. The first US-China trade settlement was held on Florida where they
agreed to settle a 100day action plan. It China-specific that the US-China relation
warmed after the visit of Trump to China in the year 2017. Trump after returning from
China implements global safeguard tariffs the US placed a tariff of 30% on Canada for
solar panels($8.5Billion) and 20% tariff on washing machine imports valuing
($1.8Billion). China in counter place a tariff of 15-25% on 128 products of China
valuing $3Billion in response to that US released a USTR list stating 1,334 products
to be tariffed worth $50Billion with a potential tariff of 25%. China, in turn, proposes
25% tariff on 106 products worth $50Billion goods. US Department of Commerce
concluded that ZTE violated US sanctions and banned ZTE for 7years in response
China imposes anti-dumping duties of 178.6% on imports of sorghum from the US. On
May 3-7,20186, 2018after many exchanges of tariff rates the US and China engage in
trade talks for the first time, where the US demands that China reduce the trade gap by
US$200Billion within 2 years. Talks, in turn, with no result. China commerce ministry
announces that it will stop tariffs on US sorghum at negotiations on May 20 th, 2018
US-China agreed to put a hold on the trade war and China agrees to buy more goods
from US two days trade between US and China. ZTE resume business with US
reduction in tariff list from 1334 to 818 products China revises it’s initial tariff list to
include 25% tariff on 545products valued at the US $34Billion on its second round it
applied further tariff on 114products valued at $16Billion. On July 6, 2018 US
implements first China-specific tariffs the US Custom and Borders protection begins
collecting a 25% tariff on 818 imported products valued at $34Billion. The USTR at
the direction of Trump considers a 25% tariff rather than a 10% tariff which was
announced on July 10 th, 2018. The total valuation of the goods was
US$200Billion).which included Consumer goods, construction material, textile, tools,
food, and agriculture commercial and electronic equipment and vehicle automotive
parts. The US Department of Commerce adds 44more Chinese entities in anti-dumping
control export list which poses a security risk to US national security. In response to
potential S tariff of US, $200Billion China announces 2 nd round of tariffs on US
products worth of $60Billion. On December 2, 2018, US and China agree to a
temporary truce to deescalate trade tension between two countries following a G20
Summit. According to the new agreement the US and China will refrain from
increasing tariffs for a period of 90days as the two side work towards a large trade
deal and the US will not impose a the on Chinese goods worth $267Billion. After the
G20 summit, China temporarily lowers on US auto and resumed buying US soya bean
exports China announced it will remove the 25% tariff on the US auto parts for a
period of 3months starting from January 1, 2019. Department January 7 US And China
began trade talks agreeing to 90days trade truce which ends on March 1 st . May 10,
2019, US increases tariff from 10% to 25% on goods worth $200Billion Chinese
products in counter China on May 13 announced a tariff hike on US products worth
$60Billion and launches tariff exemption system. On May 16 US places Huawei on its
entity list of banned product which effectively bans US companies from selling to the
Chinese telecommunication company without US government approval. May 31 China
establishes it’s very own unreliable entities list. The increase in tariffs on Chinese
Billion exports to the US till now is $250Billion and has threatened US$325Billion
more. Now how this trade war between US and China will help India in Growing.
In my opinion, India will grow but not in many sectors but it will grow in the sectors
in which India has a stronghold in the market such as Garments, Jewellery, and
textiles. China being the largest consumer of metals should have a negative impact on
the price of the base of metals. This could offer India an opportunity to become more
competitive sectors but it will be in short-run as the export from China to the US is
more diverse and India at present doesn’t have the advanced facility as China does.