US President Donald Trump during a press conference in Washington, D.C.,
| Photo Credit:
NATHAN HOWARD
In a major thaw in the ongoing tariff war between China and the US, the two countries have agreed to slash by 115 percentage points the tariffs they had imposed on each other’s goods for a 90-day period.
India’s expectations of gaining a chunk of China’s market in the US, for items such as garments, chemicals, plastics, rubber and mineral fuels, may have to now take a backseat with Beijing and Washington ready to discuss further de-escalation of trade tensions, sources said.
Following hectic negotiations over the weekend in Geneva, the US agreed to bring down reciprocal tariffs on China, for a 90-day period, to 10 per cent, from 125 per cent, while retaining the 20 per cent tariff for alleged Fentanyl trade. China will reduce its retaliatory tariffs on US products to 10 per cent from 125 per cent. Talks to further address trade issues will continue.
New Delhi has to now proactively engage with the US to get the proposed US-India bilateral trade agreement (BTA) off the ground to secure preferential access and be a reliable alternate sourcing destination, sources added.
“Substantial reduction of tariffs by the US on China’s products that are of export interest to India, particularly textile and clothing and leather, would diminish the prospects of our exports benefiting in the US market,” explained Abhijit Das, expert on international trade.
Although US tariffs on Indian goods at 10 per cent are well below the 30 per cent still imposed on Chinese imports, the massive tariff gap that once favored India is shrinking fast, pointed out “For global investors, the message is clear–Washington is re-engaging with Beijing.
This shift risks undermining the ‘China Plus One’ strategy that saw firms move manufacturing to India, Vietnam, and Mexico,” he said.
US President Donald Trump said at a press briefing on Monday that China had agreed to stop Fentanyl trade indicating that 20 per cent tariff imposed on Beijing as penalty may be dropped if that happens. “..And they’ve agreed they’re going to stop that…they’ll be rewarded by not having to pay … hundreds of billions of dollars in tariffs,” Trump said.
Investors are watching the US tilt towards China and many will hesitate to commit unless India can lock in a competitive advantage, Srivastava added.
“A smart trade deal with the US could help preserve India’s 10 per cent tariff access and prevent any hike to the proposed 26 per cent under Trump’s new country-specific duties,” he said.
China has secured tariff cuts without getting into full-fledged trade negotiations while India is already committed to negotiations, said Biswajit Dhar, Distinguished Professor, Council for Social Development. “We are in different dynamics with the US than China. In order to keep our market, we have to make concessions. There seems to be no other option,” he said.
While the roll back of tariffs by US and China is for a 90-day period, within which they will hold talks for further easing of trade, India, too, is trying to avoid reciprocal tariffs announced on Indian products. It is trying to arrive at an understanding with the US as part of the BTA being negotiated that will help it gain exemption on the 26 per cent reciprocal tariffs at the end of the tariff pause period on July 8.
India must proactively engage with the US to secure and expand its preferential trade access, emphasising its role as a reliable alternative sourcing destination, said Ajay Sahai from Federation of Indian Export Organisations. “The temporary nature of the tariff cuts may lead companies to hedge against future volatility by expanding manufacturing in India under the Make in India and PLI schemes,” he said.
India can also leverage this shift to strengthen exports in sectors that remain relatively insulated from US-China trade, such as pharmaceutical APIs, gems and jewellery, engineering goods, organic chemicals and IT-enabled services, he said.
The US and China have decided to establish a mechanism to continue discussions about economic and trade relations. “These discussions may be conducted alternately in China and the United States, or a third country upon agreement of the parties. As required, the two sides may conduct working-level consultations on relevant economic and trade issues,” per a joint statement.
Published on May 12, 2025
US President Donald Trump during a press conference in Washington, D.C.,
| Photo Credit:
NATHAN HOWARD
In a major thaw in the ongoing tariff war between China and the US, the two countries have agreed to slash by 115 percentage points the tariffs they had imposed on each other’s goods for a 90-day period.
India’s expectations of gaining a chunk of China’s market in the US, for items such as garments, chemicals, plastics, rubber and mineral fuels, may have to now take a backseat with Beijing and Washington ready to discuss further de-escalation of trade tensions, sources said.
Following hectic negotiations over the weekend in Geneva, the US agreed to bring down reciprocal tariffs on China, for a 90-day period, to 10 per cent, from 125 per cent, while retaining the 20 per cent tariff for alleged Fentanyl trade. China will reduce its retaliatory tariffs on US products to 10 per cent from 125 per cent. Talks to further address trade issues will continue.
New Delhi has to now proactively engage with the US to get the proposed US-India bilateral trade agreement (BTA) off the ground to secure preferential access and be a reliable alternate sourcing destination, sources added.
“Substantial reduction of tariffs by the US on China’s products that are of export interest to India, particularly textile and clothing and leather, would diminish the prospects of our exports benefiting in the US market,” explained Abhijit Das, expert on international trade.
Although US tariffs on Indian goods at 10 per cent are well below the 30 per cent still imposed on Chinese imports, the massive tariff gap that once favored India is shrinking fast, pointed out “For global investors, the message is clear–Washington is re-engaging with Beijing.
This shift risks undermining the ‘China Plus One’ strategy that saw firms move manufacturing to India, Vietnam, and Mexico,” he said.
US President Donald Trump said at a press briefing on Monday that China had agreed to stop Fentanyl trade indicating that 20 per cent tariff imposed on Beijing as penalty may be dropped if that happens. “..And they’ve agreed they’re going to stop that…they’ll be rewarded by not having to pay … hundreds of billions of dollars in tariffs,” Trump said.
Investors are watching the US tilt towards China and many will hesitate to commit unless India can lock in a competitive advantage, Srivastava added.
“A smart trade deal with the US could help preserve India’s 10 per cent tariff access and prevent any hike to the proposed 26 per cent under Trump’s new country-specific duties,” he said.
China has secured tariff cuts without getting into full-fledged trade negotiations while India is already committed to negotiations, said Biswajit Dhar, Distinguished Professor, Council for Social Development. “We are in different dynamics with the US than China. In order to keep our market, we have to make concessions. There seems to be no other option,” he said.
While the roll back of tariffs by US and China is for a 90-day period, within which they will hold talks for further easing of trade, India, too, is trying to avoid reciprocal tariffs announced on Indian products. It is trying to arrive at an understanding with the US as part of the BTA being negotiated that will help it gain exemption on the 26 per cent reciprocal tariffs at the end of the tariff pause period on July 8.
India must proactively engage with the US to secure and expand its preferential trade access, emphasising its role as a reliable alternative sourcing destination, said Ajay Sahai from Federation of Indian Export Organisations. “The temporary nature of the tariff cuts may lead companies to hedge against future volatility by expanding manufacturing in India under the Make in India and PLI schemes,” he said.
India can also leverage this shift to strengthen exports in sectors that remain relatively insulated from US-China trade, such as pharmaceutical APIs, gems and jewellery, engineering goods, organic chemicals and IT-enabled services, he said.
The US and China have decided to establish a mechanism to continue discussions about economic and trade relations. “These discussions may be conducted alternately in China and the United States, or a third country upon agreement of the parties. As required, the two sides may conduct working-level consultations on relevant economic and trade issues,” per a joint statement.
Published on May 12, 2025
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It is a long established fact that a reader will be distracted by the readable content of a page when looking at its layout. The point of using Lorem Ipsum is that it has a more-or-less normal distribution of letters, as opposed to using ‘Content here, content here’, making it look like readable English. Many desktop publishing packages and web page editors now use Lorem Ipsum as their default model text, and a search for ‘lorem ipsum’ will uncover many web sites still in their infancy.
The point of using Lorem Ipsum is that it has a more-or-less normal distribution of letters, as opposed to using ‘Content here, content here’, making
The point of using Lorem Ipsum is that it has a more-or-less normal distribution of letters, as opposed to using ‘Content here, content here’, making it look like readable English. Many desktop publishing packages and web page editors now use Lorem Ipsum as their default model text, and a search for ‘lorem ipsum’ will uncover many web sites still in their infancy.
It is a long established fact that a reader will be distracted by the readable content of a page when looking at its layout. The point of using Lorem Ipsum is that it has a more-or-less normal distribution
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