The impact of Indo-US trade tesions and analysis of the way forward

Abstract

When Donald Trump came into power in 2016, one of his election promises was to end all the trade deals that USA signed which he thought was unfair to USA. He was against Chinese imports and promised to narrow the huge trade deficit that USA had with China. USA accused China of unfair trade practices and IP theft. The US trade deficit with China was 419.2 billion for the FY2018. Starting with solar panels and washing machine, Trump administration levied tariff on Chinese steel and aluminum imports, aircraft parts, flat-panel televisions, batteries, medical devices, satellites, and various weapons. Chinese industries are heavily affected by these tariffs as China is mainly an export driven economy. These creates an opportunity for other emerging economies like India which can utilize it to increase their exports to USA and fill the vacant place left by China. In this report we will try to analyze these opportunities being presented to India by US China trade war. First, we will study the historic trends of USA and India trade relationships, the top exported and imported products, their increase and decrease over the last 10 years. We will also study the other major trends of Indian exports and imports with other major trading partners. We will try to figure out India’s strength in exports with viz a viz other exporting countries. We will also figure out major trends in India’s exports and imports with the world. Secondly, we will try find the areas in which Chinese exports are getting hit by USA’s tariffs. We will find out the India’s top exports which are common to Chinese exports which are getting hit. This will give us an idea about the industries which can benefit from the trade war. Then we will specifically study these particular industries, the capacity, the competitiveness and the hurdles to export. Finally, we will look at other countries which might also want to export to USA. We will see their competitive positioning viz a viz India in attracting investments in industries and increasing their current export from existing facilities. We will be using UN Comtrade data base for the figures related to trade volume, commodities and trends. The tariff related data between trading partners (like China and USA) will be taken from World Integrated Trade Solution (WITS) data base.