Spill-over effect of US trade war on China, to India

Spill-over effect of US trade war on China, to India

Trump administration has become fearful about their growth and have gone into protectionist mode. They seem to have lost confidence in their ability to create jobs and grow the economy, instead they have now taken the route of controlling imports and give opportunity for their local businesses to grow.

Anti-dumping duty on Steel & Aluminium imported to the US. Additional duties on Shrimp imports have added to the pressure that the global markets are facing due to rising bond yields & crude oil price surge. Though India is a small contributor to the US’s steel market, we have businesses which supply inputs in steel manufacturing to countries which are selling steel to the US.

Those steel related businesses have taken an impact due to the trade wars. Also there are doubts that the US administration will bring further more controls in many product segments, which will impact global markets across various industry segments.

US does not have facilities to cater to the immediate demand if imports are stopped, while in the time the facilities are set up, government will make good money from the duties which can even fund the new facilities. This being one side of forced growth, the history is that, whatever we fear, we attract it in our life.

In this manner, US fearing about other countries growing and not them, will only force the target countries like China and India become more stronger. Though these export dependent economies will have to go through some pain due to competition, soon they will also equip themselves on how not to be dependent of US for their business. Along with this the economies that will now learn a lesson on the US dominance, will shy away from importing any products from the US.

So, the down fall of the US is about to begin and supremacy of China & India is going to shine better. And this means more business growth for India. Be invested and be a part of the journey.

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Ramesh Sigamani

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