“US-China Trade War”

Any Benefits to India ?

Dr. R Nagabhushan
Asst Professor
Dept of Economics
Government First Grade College
Kuvempunagar, Mysore
 Trade War Impact

 Tariffs will make goods more expensive and will reduce

demand.

 Exporters will lose business, make less profit and employ

fewer people.

 Steel and Aluminium tariffs can hurt domestic industries that

use them as raw materials.

 The costs of all those products using steel and aluminium as

raw materials will go up.

 Even if US imposes 25% tariff on everything from China ,

Chinese growth may reduce by 5%
 Trade War Impact

 Restrictions on Chinese investment & technology export to

China

 Could lead to unnecessary inspections, product quarantines,

administrative punishments, regulatory delays etc.

 A prolonged conflict and the disruption of global supply chain

can have a ripple effect on the global economy.

 An all-out trade war could lead to a collapse of global trade

and shove the world economy towards recession.
 Impact on India

 China is India’s largest trading partner with a value of $89

billion (2016-17) and with US it’s $74 billion.

 Trade war will impact pharma sector, apparel &textiles,

iron &steel, mineral fuels and fisheries

 A Trade war with US will impact the economies growth

momentum.

 India’s highest imports from US are very critical such as

nuclear reactors, mineral fuels, aircrafts, space crafts and
medical equipment. Any higher duty on these products
will impact India’s key sectors.
 Impact on India

 Import duty on steel & aluminium will cost India $241

million.

 Cost of production will go up due to rise in the cost of raw

materials

 Prices of foreign motor bikes (such as Harley Davidson),

almonds, walnuts, pulses etc will go up
 Advantage India
 India can capture the Chinese commodity market
vacated by US exports due higher import duties.

 India can replace US exports in at least a hundred

products totaling $130 billion.

 Can narrow the trade deficit with China (Exports to

China: Rs 86,015 crore, Imports: 4.91 lakh crore)

 Indian exports in fresh grapes, cotton linters, flue-cured

tobacco, lubricants & Chemicals can increase.

 India can now export oranges, almonds, walnuts, wheat,

corn etc.
Indian Manufactures who can benefit

 Machinery
 Electrical equipment
 Vehicles & transport parts
 Chemicals
 Plastics & Rubber products
 Pumps
 Parts of Military Aircraft
 Engineering Goods
 Apparel &Textiles
 Footwears
 Toys & Games
 Cellphones
 Opinions
"If there is a next $200 billion, depending on what those products are,
I think the USTR will continue to minimize the hit" on the U.S.
economy. Part of the U.S. strategy is to limit Chinese investment,
licensing and joint ventures of high-tech technologies that it sees as
in its "national economic interests."

-William Zarit, chairman of American Chamber of Commerce

“The collateral damage from an escalating U.S.-China trade war will

be widespread, hitting many Asian countries that are part of China’s
manufacturing supply chain in sectors such as electrical and
electronic products.”
-Rajiv Biswas, Asia Pacific chief economist