The USâ€“China Trade War: Impact on India and Other Asian Regions
Rajesh Chadha (),
Sanjib Pohit () and
Journal of Asian Economic Integration, 2021, vol. 3, issue 2, 144-168
The growing protectionism globally and the outbreak of a major USâ€“China trade war led Indian exports facing higher tariffs. This article has tried to investigate how India should react to the trade tensions between the two largest economies of the world. This will help policymakers in India to assess the impact of the likely developments and choose between different policy responses. In a bilateral USâ€“China trade war, while both the United States and China stand to lose in terms of GDP, exports and imports, India stands to gain. India stands to lose when the USâ€“China trade war applies also to India, which faces higher tariffs from both. Indiaâ€™s losses increase further when India responds by increasing its tariffs on imports from the United States and China. In fact, reducing own tariffs could be a wiser step. Enhancing productivity measures by raising port efficiency and making trade and transport sector more efficient appear to pay dividend. India gains even more from joining the RCEP-like trading block when the United States and China are indulging in bilateral trade war. Last but not least, USâ€“China trade war seems to affect Asian countries, some positively some negatively. JEL Codes: F13, C68, F14
Keywords: Trade policy; tariffs; computable general equilibrium modelling; India; US; China (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:sae:jfasei:v:3:y:2021:i:2:p:144-168
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