What Is A Trade War? All About Current Global Trade War Threats

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    Global trade war is largely feared and tensions are only mounting with trigger being US President Donald Trump's plan to levy trade tariffs on import of steel and aluminium @ 25% and 10% respectively. This was a protectionist measure to safeguard internal industries however it will impact severely all the stakeholders not excluding US industries and consumers.

    Trade war

    Trade war

    It is a move in which countries impose import restrictions so as to affect other country's trade. The recent fears are stoked as Trump is taking action against China and other economies for intellectual property theft.

    Donald Trump’s action this far

    Donald Trump’s action this far

    On Thursday, the US president signed a memorandum that could impose tariffs on $60 billion of Chinese goods. The products include a list of imported items from China that are yet unspecified. The tariffs shall be effected once the consultation period of 30 days ends after the list of products is released by the US administration.

    In retailiation, China said to impose tariffs of its own on items imported from the US upto $3 billion. "We will retaliate. If people want to play tough, we will play tough with them and see who will last longer," Chinese ambassador is quoted in a Reuters report.

    Currently, exemption in regard to metal tariffs has been extended to European Union (EU) and US hence expect concessions for such a rebate from these allies.

     

     

    Trade war fears jolted global stock markets with huge sell-off

    Trade war fears jolted global stock markets with huge sell-off

    On Friday, Asian markets were witness to heavy sell-off with Dow Jones Industrial Average falling a sharp 3%. Other markets also declined with Japan Nikkei being the worst hit. Indian markets were no exception to the trade war effect and Nifty also fell in line and breached 10000 level and closed the week ended March 23, 2018 at 9998 while Sensex plunged huge 400 points.

    Global Trade War: Its impact on Indian trade and economy

    Global Trade War: Its impact on Indian trade and economy

    If the global trade war breaks out to its full peak, India's trade will also be impacted in line though India is not a major exporter of the two commodities to the US. Also the double-digit growth in exports anticipated for India for the FY 2018-19 will become difficult to achieve.

    Raghuram Rajan’s view of the global trade war

    Raghuram Rajan’s view of the global trade war

    "I don't want to use the term trade war, as we are not quite there yet. I think it is important that we stay away from it because that could hit the current recovery, which has been beneficial globally. For him, to do that at a time when the US is quite strong and has got full employment looks quite reasonable. I think we should not do this," he added on the sidelines of Global Digital Summit.

    Also, he said that the recent hike in trade tariffs by certain countries would adversely affect the current economic recovery.

    Goodreturns.in

     

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