Newly elected US President Donald Trump is working on a plan to increase tariffs on Chinese exports upon his return to office. This move by Trump could have a negative impact on India.
According to the report of the rating agency CRISIL, after the US sanctions, China can aggressively increase its exports to Asian markets. For this reason, Indian exporters will find it difficult to compete with China in regional and global markets. This will have a direct impact on Indian exports.
For this reason, global trade is also under threat. The report said that due to high tariffs and slowdown in the Chinese economy, there is a possibility of increased sugar exports to other countries across the world, including India.
According to reports from Asia Times, China has increased its exports to South Asian countries.
Trump threatened to increase tariffs on India
India is also among the countries facing Trump’s threat to increase tariffs. Trump has repeatedly threatened to increase tariffs on India. In a statement last month, Trump said that whatever tariffs India imposes on America, we will also impose the same tariffs in return.
Trump said India is among the countries that impose the highest tariffs on American products. Trump’s Commerce Secretary also threatened to impose tariffs on India.
Besides India and China, Canada and Mexico also face the tariff threat from Trump.
Indian exports are falling
According to the CRISIL report, Indian exports have been volatile in the current financial year. An increase in exports was noted in the first quarter (April-June). But it decreased in the second quarter (July-September). A further decline was noted during the last two months of the third quarter.
Exports fell by 4.8% in November and by 1% in December. The main reason for this is the decline in jewelry and oil exports. Jewelry and oil exports declined by 26% and 28%, respectively. However, at the same time, exports of ready-made garments, minerals, handicrafts and coffee recorded strong growth.
The CRISIL report highlights the policy changes that China will make in the coming months to maintain its exports. Its impact on global trade will be visible.
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