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05 February
2019
 |
India
(The Total Investment & Insurance Solutions)
India is among the several
countries that stand to benefit from the ongoing trade tensions between the
world's top two economies - the US and China, the UN has said in its latest
report. The US and China are locked in a trade war since President Donald Trump
imposed heavy tariffs on imported steel and aluminium items in March last year,
a move that sparked fears of a global trade war.
In response, China imposed tit-for-tat
tariffs on billions of dollars worth of American imports.
The
United Nations experts said Monday that the tit-for-tat trade dispute between
China and the United States may do little to protect domestic producers in
either country and could have "massive" implications on the global
economy unless it is resolved.
Of the USD 250 billion in Chinese exports
that are subject to US tariffs, only about six per cent will be picked up by
firms in the US, according to a report by the UN Conference on Trade and
Development (UNCTAD). And of the approximately USD 85 billion in US exports
that are subject to China's tariffs, only about five per cent of this will be
taken up by Chinese firms, according to the UN research. In a bid to meet the
US' demand of bringing down the USD 375 billion bilateral trade deficit, China
has pledged to take measures to step-up American imports and investments. March
1, 2019 is the deadline for implementing the measures.
Unless the US and China agree to drop their
tariff dispute by March 1, duty on each country's products will rise to 25 per
cent, up from the current 10 per cent level, the UN said. Countries that are
expected to benefit the most from the trade war are the EU members as exports
in the bloc are likely to grow by USD 70 billion.
Japan
and Canada will see exports increase by more than USD 20 billion each, it said.
Other countries set to benefit from the trade tensions include Australia, with
4.6 per cent export gains, Brazil (3.8) India (3.5), Philippines (3.2) and
Vietnam (5), the study said.
Quoting former US Secretary of State Cordell
Hull, UNCTAD's Pamela Coke-Hamilton repeated his description of protective
tariffs as "a gun that recoils on ourselves", which had also
contributed to the Great Depression of the 1930s and the rise of extremism.
"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 per cent, which is a significant difference from the 10 per cent as it
currently exists," Coke-Hamilton said.
The
implications of such a development would be "massive", the UNCTAD
Director, Division on International Trade in Goods and Services, and
Commodities, continued, adding that its effects would first of all involve
"an economic downturn... due to instability in commodities and financial
markets". "One major concern is the risk that trade tensions could
spiral into currency wars, making dollardenominated debt more difficult to
service," the report added. Imposing tariffs make US-made products cheaper
than imported ones, and encourage consumers to buy American. The Total Investment & Insurance
Solutions
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