US President Donald Trump’s tariff policy has given rise to the Global Trade War. This is affecting different countries differently. Many stock markets of the world have seen a huge decline, with the most decline in the US stock markets.
Many countries have also started retaliation against this policy. Canada and China have announced to increase tariffs on US products, while Mexico and Argentina are also stepping in this direction. The biggest impact of this trade war is going to have on the global economy. How challenging this policy will be especially for India and other Asian countries, is an important question.
The impact of trade war is not limited to countries that export America only
According to the report of brokerage firm Nomura, the impact of the American tariff policy will not be limited only to countries exporting the US, but will also have an indirect impact on other countries.
- Many Asian countries export the US on a large scale, while some countries do not export directly to the US but after adding the value, they send goods there through other countries.
- Vietnam is a prime example of this, which imports raw materials from China, adds value in it, and then the finished product exports to the US.
- Such countries will also have an impact of American tariffs, even if they are not directly part of this war.
Vietnam will affect the most
According to Nomura report, the tariff war will have the most impact on Vietnam.
- Vietnam American Export share in GDP 8.9% Is, which will affect this country the most.
- after this Taiwan (6.3%) and Thailand (5.5%) The number of comes.
- Countries whose economy is more dependent on American exports will be the most affected by this trade war.
Electronics and computer sector will suffer the most
- From American tariff Electronics and Computer Sector The most likely to be damaged.
- Increasing tariffs by the US will also cost production in Mexico and Canada, which will also affect the Asian countries that export to the US through these countries.
- The size of the electronics sector has become quite large over the years, so the decline in the region will have an impact on the entire global supply chain.
Limited impact on India, but caution is important
This trade war will not have as much impact on India as it can be seen on other Asian countries.
- Of India American export share in GDP only 2% Is, which is relatively low.
- However, India may be indirectly affected, as India exports value-aided products to Canada and Mexico, and American tariffs will apply to both these countries.
- Nevertheless, this will not be a major problem for the Indian economy, as Indian exports do not have much dependence on the US market.
Inflation will increase in America, consumer demand will decrease
The impact of this trade war will not be limited to Asian countries only, but the US economy will also be affected by it.
- Because of American tariff Inflation will increaseWhich will reduce consumer spending.
- Consumer demands may reduce orders of American companies, which will also affect the export of Asian countries in a long time.
- If consumer spending declines in the US, it may have a moderate and long -term impact on the economy of Asian countries.
