GLOBAL TRADE WARSEven before Donald Trump became the President of United States of America, he had been talking about making trade fairer for the US as according to him many allies of the US were taking of the advantage of it. So when He became the president , he made his priority to reduce the massive trade imbalance that in his opinion was the result of bad trade deals by his predecessor. The country that came in his line of fire was China which had a trade deficit of roughly $ 350 Billion. Donald trump insisted that the deficit be brought down upto $ 200 Billion. He also used nation security as an excuse to impose tariffs on steel and aluminium which had a multifold effect on many Asian economies.
China being an Asian super power, all the tariffs imposed on China and tit for tat tariffs by China has ultimately led to profound impact on economic and political order of the world.Vietnam- Depriciation of chinese yuan will give Chinese products an edge .Chinese manufacturers will ask for discounts from partners in Vietnam. Increase import cost.Export dependent Singapore and Malasiya face weak GDP growth due to devaluation of yuan.Cambodia has benefitted from the trade war escalations as these trade wars have boosted employment in it’s huge garment industry.Taiwan and South Korea are the biggest supplier of mobile components in Asia. Any decline in the demand for smart phones in China due to tariffs will result in decline in demand for components as well thereby impacting these countries badly.
China-Depriciation of yuan will offset the loss in exports for China. Increased competitiveness for Chinese exporters, meaning Chinese goods will be cheaper for Americans.India- Countries exporting steel to USA will be forced to look at other major steel consuiming markets like India to sell their surplus and as a result distorting the domestic market due to dumping.A major impact of the trade war has been weakening of rupees which reached $ 72.However India can become more competitive in segments like textile garments jewellery as tariffs will provide opportunites to enhance the exports to ChinaIndonesia has placed various counter measures to mitigate the uncertainities caused by trade wars such as strengthening local industries and curbing raw material import demands by developing basic industriesTariffs have prompted companies to move more factories from China to lower-cost countries in Asia.Foreign direct investment between US and China could slow and increasingly be diverted towards alternate Asian manufacturing locations.
