NEW DELHI: US President Donald Trump on Friday walked the talk by slapping 25% tariffs on $200 billion worth of Chinese goods, days after he threatened to do so. Beijing’s reaction was surprisingly muted as it ‘regretted’ the US decision and said it would be forced to retaliate.
The move, which is bound to escalate the trade war between the world’s largest economies, came even as a Chinese delegation was in Washington to broker peace with the US.
As the new tariffs kick in with immediate effect, it will be 150% more expensive for American companies to bring Chinese goods into the country. This is the biggest hike after the US imposed a 10 per cent tariff on Chinese products last year.
India could be next in the line for US’s strong arm tactics in resolving trade disputes and may face greater Chinese competition in its traditional foreign markets.
With the US market partially shutting down for China, experts believe India’s northern neighbour will now try and compensate by selling more in other markets such as India. This could impact not only Indian exports but also Indian manufacturers selling in the domestic market.
American Commerce Secretary Wilbur Ross had dropped hints of US’s hardening stance during his India visit earlier this week when his team called for lowering of duties on a host items including automobiles, motorcycles, alcoholic beverages and mobile phones. Ross also sought an end to data localisation rules for e-retailers like Amazon and exclusion of US airlines from ground handling.
“India has already conceded on many issues but we except tough bargaining by the US on duty cuts,” said a commerce ministry official. India is willing to offer some concession but not everything the US wants, the official added.