India-US India set to benefit from Trump's possible tariff hike on Chinese imports: Report
New Delhi/IBNS: After Donald Trump's win in the US presidential election, a report from CareEdge suggests that India might gain from shifts in global trade if Trump proceeds with plans to impose hefty tariffs on Chinese imports.
By encouraging a move away from China in the global supply chain, these policies could open new avenues for India.
Trump’s proposed measures include a potential 60 percent tariff on Chinese imports, with additional tariffs ranging from 10 to 20 percent on goods from other countries.
These steps aim to reduce US reliance on Chinese products, likely leading companies to explore manufacturing options outside China.
"India could benefit from any reorientation of the global supply chain away from China," the report highlights.
The report explains that such tariffs could prompt US businesses to consider alternative manufacturing locations to avoid increased costs.
This shift could make India an appealing option, potentially boosting its manufacturing and export sectors.
However, it also warns that high tariffs could have wider economic impacts, particularly in the US.
"Higher tariffs could disrupt global trade flows and weaken trade growth, contributing to inflationary pressure in the US by raising the prices of imported goods," the report states.
This potential price rise in the US might impact global trade, slowing growth worldwide.
For India, a supply chain shift could bring new business, though a general slowdown in trade may also decrease demand for Indian exports, affecting multiple sectors.
The proposed tariffs are not limited to China.
Trump has also focused on Mexico, suggesting tariffs of up to 200 percent on cars manufactured there, along with a 25 percent tax on other imports if Mexico does not reduce border crossings into the US.
These policies aim to deter Chinese firms from setting up operations in Mexico to sidestep US tariffs.
"Trump intends to prevent Chinese companies from establishing plants in Mexico to avoid US import taxes," the report notes.
While these policies present global trade challenges, they also offer India a unique strategic opportunity.
As companies look for alternative manufacturing locations, India could position itself as a reliable hub if it enhances its industrial infrastructure and business climate.
Ultimately, India’s success in capitalizing on these shifts will hinge on its ability to streamline business operations, improve infrastructure, and make itself an attractive player in the changing global supply chain.
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