US-China trade war 2020
In a big trade war between United States and China, who is in the gaining position? The answer is India. But this answer is wrong. After a huge trade war with China and its contribution in coronavirus pandemic, the US significantly dropped imports from the second largest economy.
It was widely speculated that India would be on the gain side, and US import-graph from India will grow significantly. But this did not happen. Despite being close ally of the US and its own recent initiatives to push manufacturing sector, the South Asian giant could not make it to increase its share in shipments to the super power, says a study.
US-China trade war 2020: Who gains, who loses
New Delhi could see only a minor rise in its exports to Washington when American companies looked for diversification of supply routes in other parts of the world in result of the trade war with China, says the study of Rabobank. Major beneficiaries of the US shifts of imports were Vietnam, Maxico and Taiwan, after American importers looked to diversify their supply chain.
Well, economists Ralph van Mechelen and Michiel van der Veen gave a major reason for India not benefiting significantly. That is, major import shift occurred in computers and electronic products, the sector that is relatively small in India, currently. In response to US-China trade war, manufacturing shipments from China to America saw a drop by 17% or $88 billion last year, inform the economists.
In a result, China’s share in US imports declined by 4 percentage points. As per the report, American companies are forced to reassess their supply chain in response to the US-China trade war. And also, due to China’s contribution in coronavirus pandemic. The economists also believe that increasing geopolitical crisis can further accelerate a relocation in the supply chain in a number of sectors.
Major reasons of US import shift from China
Here it is also important to have a glance into the bitter trade battle between the US and China. Both the countries have locked horns over the trade between the two biggest economies. American President Trump has been accusing Beijing for unfair trade practices and intellectual property theft for a long time now.
On the other hand, China is feared that the US can curb its ambitions to be a global economic power. Both the countries have imposed tariff on each other’s goods of worth hundreds of billions of dollars. In January this year, the two countries signed a preliminary deal, but some major issues remained unsolved. As all the negotiations went in vain, global economy has suffered due to uncertainties.
Then came coronavirus pandemic that has infected over 12 millions, leaving more than half millions dead so far in the world. Americans have to pay the most with highest infection and mortality rates in the world. China has been accused of making and circulating coronavirus as a biological weapon to harm the humanity.
More reasons for bitterness
Other big reason for bitterness between US and China is that the later has a tendency of claiming land and sea areas of all neighboring countries as its own. During coronavirus outbreak, the communist nation is more excited for expansion in south sea area. Also it’s trying to enter in other countries’ territory, including in Ladakh of India.
In all above cases, the super power is very unhappy with the communist nation. That’s why its industry players are relocating their supply chain away from China. Today, entire world stands against China as its recent acts are certainly a threat to the humanity. It is interesting to see how China pays cost of its deeds and where the things go in coming days.
