In Donald Trump's 'China' Warning, A Relief In Sight For India?

New Delhi: China and the United States have been embroiled in a major trade war ever since US President Donald Trump imposed reciprocal tariffs on 133 partner trading nations. This move sent shockwaves across the world, leading to a bloodbath on Wall Street and other stock markets.

Trump imposed a 34% tariff on China, one of the highest among the nations targeted, stating that it was time for the United States to stop being taken for granted. In addition to China, Trump levied trade duties on countries including India, Israel, the UK, the EU, the UAE, Saudi Arabia, Pakistan , Australia, New Zealand, Thailand, Singapore, Malaysia, South Korea, and Japan among others.

Trump released a comparison chart illustrating how US trading partners taxed America in bilateral trade versus the percentage of tariffs imposed by his administration. He described these tariffs as "discounted reciprocal tariffs," emphasising that they were still significantly lower than what partner nations charged the US.

China retaliated in panic, re-imposing 34% tariffs on United States

China was the first to retaliate, imposing 34% tariffs on American goods—the same rate levied by the Trump administration. This triggered a strong response from Trump, who accused China of panicking and playing it wrong.

In a post on Truth Social, Trump stated, “China played it wrong, they panicked—the one thing they cannot afford to do.”

In another post, Trump claimed, “China has been hit much harder than the USA, not even close. They, and many other nations, have treated us unsustainably badly. We have been the dumb and helpless ‘whipping post,’ but not any longer. We are bringing back jobs and businesses like never before. Already, more than five trillion dollars of investment, and rising fast! This is an economic revolution, and we will win. Hang tough, it won’t be easy, but the end result will be historic. We will make America great again.”

Trump issues new warning to China, threatens to impose additional 50% tariffs  

Despite Trump’s warnings, China has not relented or withdrawn its 34% tariffs on US goods. As the world watches the escalating trade war, Trump issued another warning, threatening to impose an additional 50% tariff on China, bringing the total trade duty to 84%.

He also announced that all planned trade talks with China would be terminated if Beijing failed to withdraw its tariffs by April 8, 2025.

In a detailed post on Truth Social, Trump wrote, “Yesterday, China issued retaliatory tariffs of 34%, on top of their already record-setting tariffs, non-monetary tariffs, illegal subsidisation of companies, and massive long-term currency manipulation, despite my warning that any country that retaliates against the US by issuing additional tariffs, above and beyond their already existing long-term tariff abuse of our nation, will be immediately met with new and substantially higher tariffs, over and above those initially set.”

Trump further mentioned that while talks with China would be terminated, negotiations with other nations requesting trade discussions would begin immediately. One such country is India, which is in the process of finalising a Bilateral Trade Agreement (BTA) with the US. Earlier today, External Affairs Minister S Jaishankar held talks with US Secretary of State Marco Rubio to discuss the early conclusion of the BTA.

Taking to X (formerly Twitter), Jaishankar wrote, “Good to speak with Secretary Rubio today. Exchanged perspectives on the Indo-Pacific, the Indian Sub-continent, Europe, Middle East/West Asia, and the Caribbean. Agreed on the importance of the early conclusion of the Bilateral Trade Agreement. Look forward to remaining in touch.”

Is there a silver lining for India amid US-China trade war? 

China, which is the second largest economy and a major manufacturing hub in Asia, is at trade war with United States and the fight is only escalating further. So if Beijing doesn't relent and Trump goes ahead with imposing additional 50% tariffs, taking the overall duty to 84%, it's going to prove disastrous for China. Let's see how: 

• In 2024, the approximate value of trade between the United States and China stood at $582.4 billion. Of this, the US exported $143.5 billion worth of goods to China and imported $438.9 billion worth of goods from the country, resulting in a trade deficit of $295.4 billion.
• If 84% tariffs are imposed on China, it could lead to an unimaginable rise in the cost of goods in the United States—almost doubling—and heavily impacting Chinese businesses. With nearly double the cost, Chinese exports to the United States would face tough competition from other nations.
• India, in such a scenario, may benefit as increased competition with Chinese goods would make Indian products comparatively cheaper. India could find itself in a more favourable position if it enters into a Bilateral Trade Agreement (BTA) with the US. Talks regarding this agreement are already underway, and Trump has mentioned that nations requesting trade talks should start immediately.
• If US agrees to reduce tariffs in the Bilateral Trade Agreement, the situation for Indian businesses would improve significantly compared to other partner trading nations, giving India a definite edge over China.
• Additionally, the trade war between the US and China may motivate industries to relocate to India—a $4 trillion economy that is soon expected to become the third-largest economy in the world.
• Therefore, as the US-China trade war deepens, India appears to be in a position to benefit from the situation.