US AND CHINA IN TRADE WAR…

WILL IN­DIA RE­GAIN LOST BUSI­NESS? WILL IN­DIAN AP­PAREL EX­PORTERS SEE IN­CREASED OR­DERS ? AN ANAL­Y­SIS BY TEAM PER­FECT SOURC­ING…

Perfect Sourcing - - Cover Story -

It seems that the world trade is mov­ing to­wards new di­men­sion as re­cently the US and China is at log­ger­heads with each other over the is­sue of tar­iffs on im­ported items. The fact of the mat­ter is that not only the US but en­tire world is de­pen­dent on sourc­ing of ba­sic to lux­u­ri­ous prod­ucts from China and has a huge con­trol on ex­ports. To re­duce its de­pen­dence the U.S. Pres­i­dent Don­ald Trump im­posed tar­iffs on $34 bil­lion worth of Chi­nese goods as part of the new tar­iffs pol­icy on July 6, 2018, which then led China to re­spond with sim­i­lar sized tar­iffs on U.S. prod­ucts.

On June 15, Trump de­clared in a state­ment that the United States would im­pose a 25% tar­iff on $50 bil­lion of Chi­nese ex­ports. $34 bil­lion would start on July 6th, with a fur­ther $16 bil­lion to be­gin at a later date. As per the Trump’s ad­min­is­tra­tion the tar­iffs were nec­es­sary to pro­tect na­tional se­cu­rity and the in­tel­lec­tual prop­erty of U.S. busi­nesses, and to help re­duce the U.S. trade deficit with China.

Trump had al­ready, in Au­gust 2017, opened a for­mal in­ves­ti­ga­tion into at­tacks on the in­tel­lec­tual prop­erty of Amer­ica and its al­lies, the theft of which had been cost­ing Amer­ica alone an es­ti­mated $225 bil­lion to $600 bil­lion a year.

Over 1,300 cat­e­gories of Chi­nese im­ports were listed for the tar­iffs, in­clud­ing air­craft parts, bat­ter­ies, flat­panel tele­vi­sions, med­i­cal de­vices, satel­lites, and var­i­ous weapons. China re­sponded on April 2 by im­pos­ing tar­iffs on 128 prod­ucts it im­ports from Amer­ica, in­clud­ing alu­minum, air­planes, cars, pork, and soy­beans (which have a 25% tar­iff), as well as fruit, nuts, and steel pip­ing (15%).

China’s Com­merce Min­istry ac­cused the United States of launch­ing a trade war and said China would re­spond in kind with sim­i­lar tar­iffs for US im­ports, start­ing on July 6. Three days later, the White House de­clared that the United States would im­pose ad­di­tional 10% tar­iffs on an­other $200 bil­lion worth of Chi­nese im­ports if China re­tal­i­ated against the U.S. tar­iffs. The list of prod­ucts in­cluded in this round of tar­iffs was re­leased on July 11 and was set to be im­ple­mented within 60 days.

Im­port and ex­port mar­kets in a num­ber of na­tions feared the tar­iffs would dis­rupt sup­ply chains which could “rip­ple around the globe.

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