WASHINGTON: In a move that’s shaken global markets, and intensified the tariff war, the US President Donald Trump has imposed a staggering 104 per cent tariff on Chinese imports, effective immediately, after Beijing refused to roll back its retaliatory 34 per cent levy on American goods.
The tariff war, which first flared during Trump’s earlier term in 2018, had already sent shockwaves through global supply chains.
The escalation marks the most aggressive step in the ongoing US-China trade standoff, pushing the world’s two largest economies into dangerous new territory.
Back then, it led to rounds of tit-for-tat duties on hundreds of billions of dollars worth of goods, dampened trade volumes, and hit export-reliant nations like India. The current development rekindles fears of a 2019-style global trade slowdown.
India, which counts both the US and China among its top trading partners, is watching the tariff war closely. While the US has grown into India’s largest export destination in recent years -overtaking China – India could face renewed pressure on sectors like electronics, auto components, and chemicals, which are tightly integrated with global value chains involving both Washington and Beijing.
Global equity markets hit
Global equity markets reacted with broad-based selloffs, echoing losses not seen since the pandemic’s peak. Analysts warn that extended hostilities could fan inflation globally, derail central banks’ easing efforts, and possibly impact India’s own growth momentum.
The government in New Delhi, which has so far taken a balanced stance in the US-China rivalry, may now be forced to rethink trade strategy and deepen bilateral arrangements with the West to buffer against collateral damage.
China, in its official response, said it would “fight to the end,” rejecting US accusations of trade manipulation and warning of countermeasures. Trump, meanwhile, left the door open for talks but insisted on a “deal on American terms.”
Outlook
With no side blinking and diplomatic talks uncertain, the situation may worsen before it gets better. For India, the turbulence offers both risk and opportunity – risk from global headwinds, and opportunity to attract supply chains and investment seeking alternatives to China.
But much will depend on how long this tariff tug-of-war drags on – and how the world, especially India, positions itself amid the fallout.
