Tariff Impact: China Says PM Modi Warmly Welcome, Ready To Lead SCO With India

Beijing: Amid an escalating trade war with the United States, China is suddenly turning towards India and attempting to rebuild its ties with New Delhi. Recently, China announced that Prime Minister Narendra Modi is “warmly welcome” to visit their country this year, as Beijing prepares to lead the next stage of the Shanghai Cooperation Organisation (SCO) alongside India and other members.

This shift in China's approach comes at a time when relations between Beijing and Washington are at its lowest. The two nations are embroiled in an intensified tariff war, which began when Donald Trump imposed reciprocal tariffs on China in an effort to reduce America's trade deficit and balance imports and exports.

Trump initially imposed a 25 per cent trade tax on China, to which Beijing retaliated with an equivalent trade duty on the United States, declaring its readiness for a tariff war if that was what America really looking for.

The ongoing tariff war, with both nations imposing and countering trade taxes, has left Beijing in a situation where it is starring a whopping 245 per cent trade duty. This situation, if not handled with maturity and caution, especially while dealing Donald Trump, could severely impact China's economy, given its heavy reliance on exports to the United States.

The situation for China is much worse because at a time when it faces a 245 per cent trade tax, the rest of the world is nearing trade deals with Trump, particularly India, as a Bilateral Trade Agreement (BTA) is likely approaching its conclusion. Additionally, Trump has temporarily paused his reciprocal tariffs for 90 days for all those countries who didn't retaliate to his trade duties except for China.

In these troubled waters, China is making desperate attempts to soften its stand against New Delhi and mend ties that deteriorated following the 2020 Galwan clash and border standoff.

In recent weeks, Beijing has softened its stance towards India, issuing statements suggesting that both nations should support each other saying an ‘Elephant-Dragon dance’ is the way forward.

However, China's sudden change of heart should not be mistaken for real and New Delhi is well aware of this reality.