The United Nations, in its latest report, said India is among those handful countries that stands to get benefits from the ongoing escalated tensions between the world’s two largest economy holder – the United States and China.
According to Economic Times news reports, China and the USA has been locked into a trade war since the US President Donald Trump imposed high tariffs on imported Chinese steel and aluminum items last year in March, a move that has sparked threats and fears of the global trade war. To retaliate, China has imposed tariffs, tit-for-tat, on billion dollars’ worth of American imports.
In its report, the UN experts said the tit-for-tat trade conflict between US and China might protect producers in either country and could also have “massive” implications on the global economy till it does not get resolved.
About USD 250 billion in Chinese exports, subjected to the US tariffs, only about six percent will be taken by firms in the USA, according to the reports presented by the UN Conference on Trade and Development (UNCTAD). And about USD 85 billion in the US export which is totally subjected to Chinese tariffs, Chinese firm would take only five percent of its, according to the UN reports.
In an effort to meet Washington demands to bring down USD 375 billion bilateral trade deficit, Beijing has vowed to take several key measures to step-up the US imports and investments. The deadline for implementing the measures by China is March 1, 2019.
Unless Washington and Beijing agree to calm down their trade dispute by March, reliability on both nations’ products will rise up to 25 percent from the present 10 percent, the UN reports said.
However, the countries, that are expected to be benefited from US-China trade conflict is consists of India with about 3.5 percent export gains, Vietnam with 5 percent, the Philippines with 3.2 percent, and Brazil with around 3.8 percent, the study stated.
UNCTAD’s Pamela Coke-Hamilton reiterated while quoting former US secretary of state Cordell Hull, his description of the protective tariffs as a “gun that recoils on ourselves”, which also had contributed to the great depression of the 1930s as well the rise of extremism.
Coke-Hamilton said: “I think that is a single lesson from what we have had here today. If – barring an agreement between the US, China on March 1 – tariffs will escalate to 25 percent, which is a significant difference from the 10 percent as it currently exists.”
He also warned the dispute could also hit East Asian producers harder along with a projected USD 160 billion contraction in the export unless any dialogues between the US and China happens before the March 1 deadline.
It further underlined the “common concern” over trade dispute that it has an unavoidable impact over the “still fragile” global economy, especially over commodity-rich, developing countries that depend on exports.
The report added: “One major concern is the risk that trade tensions could spiral into currency wars, making dollar-denominated debt more difficult to service.”