Trade War Current Affairs
India has notified higher tariffs on 29 items imported from United States (US). This is was in retaliation against US announcement imposing tariffs on steel and aluminium items — 25% and 10% respectively — imported from all countries except Canada and Mexico in March 2018 to compensate from loss of revenue.
The 29 items includes agricultural products such as almonds, apples, chickpeas, lentils, and walnuts, and industrial inputs such as some grades of iron and steel products. These higher tariffs amounting to $240 million will come into effect from August 2018, leaving room for further discussions between US and India before new rates are implemented. It follows India’s notification to World Trade Organization (WTO) that it was imposing additional tariffs on 30 items in retaliation for US duty on steel and aluminium. These additional duties were aimed at helping government earn an additional $241 million, equivalent to amount of iron and steel trade affected by US measures. The latest notification does not mention tariff hike on 800 cc (or more) motorcycles as it was earlier notified in 30 items list to WTO.
China in tit-for-tat action has imposed additional tariffs and duties on $50-billion worth of American products. It comes after US President Donald Trump slapped stiff 25% tariff on Chinese goods worth similar amount. This has triggered full-fledged trade war between world’s two largest economies.
The decision was taken in line with relevant stipulations of Foreign Trade Law of China and Regulations of China on Import and Export Duties, as well as fundamental principles of international laws. China imposed additional duties of 25% on 659 items of American products. Out of the 659 items, tariffs on 545 items worth about $34 billion including agricultural products aquatic products and vehicles will be effective from July 2018. The tariffs on remaining 114 items, which include chemical products, medical equipment and energy products, will be declared later. With this, trade conditions of these goods will affect relevant producers and trade companies as well as production and operation of upstream and downstream industries.
US had announced additional tariffs of 25% on Chinese imports worth approximately $50 billion, accusing it of intellectual property theft and unfair trade practices. US also had notified that it will continue to impose additional tariffs if China takes retaliatory measures
The move to impose import tariffs came as two countries held several rounds of talks following US President Donald Trump’s demand to slash bilateral trade deficit by $100 billion in month followed by $200 billion to address $375-billion deficit.
In mid-May 2018, both countries had announced cease-fire in trade war after two rounds of trade negotiations. In the first round, China had agreed to significantly increase purchases of US agricultural and energy products to reduce trade imbalance. But the second round of trade talks in Beijing failed to yield any breakthroughs. Moreover, US President’s decision to impose fresh tariffs on China follows his recent imposition of steep tariffs on steel and aluminium imports from Canada, European Union (EU) and Mexico on national security grounds.