The Study of Impact of US-China Trade War on Indian Economy Prof. (Dr.) Jadhav Babasaheb R.1, Prof. (Dr.) Chaudhari Chetan2 1Associate Professor, Dr. D. Y. Patil Vidyapeeth's, Global Business School and Research Centre, Pune, Maharashtra, India 2Director and Professor, Dr. D. Y. PatilVidyapeeth's, Global Business School and Research Centre, Pune, Maharashtra, India Online published on 7 October, 2019. Abstract An impending trade war between US and China, the world's two largest economies can cause insurmountable consequences of immeasurablescale. It can cause distortions in the complex web of interconnected commodity and value chains sprawled across the boundaries, ultimately leading to suboptimal social welfare of the international community. The present research paper is small step to study theimpact of US-China trade war on Indian Economy. US President Donald Trump sees China as a major economic adversaryand he has done so for quite a long time. In an interview in 2015, he stated “because it's an economic enemy, they have taken advantage of us like nobody in history, it's the greatest theft in the history of the world what they have done to the United States, they have taken our jobs”. In a similar tone, Trump's National Security Strategy of 2017 criticizes that China challenged American power, influence and interests attempting to erode American security and prosperity. Many share Trump's threat perception in the United States. According to a report of the polling institute Pew Research Center, a majority of Americans view China unfavorably. The top issues Americans are concerned about include the large US debt held by China, cyber-attacks from China, the country's impact on the global economy, the loss of US jobs to China and the US trade deficit. The United States has had a large deficit in merchandise trade with China for many years. Amounting to USD 382 billion in 2018, the deficit in trade in goods is higher than that with any other country in absolute numbers. Trump finds the causes mostly in unfair trade practices abroad-subsidization of domestic companies, overcapacities, forced technology transfer and theft of intellectual property rights. But the trade conflict is about much more than the US trade deficit, it is all about power and economic dominance. This was reinforced by the Made in China 2025 strategy, which aims to make the country a ‘manufacturing superpower’. Partially Trump is right, China has become a heavyweight in the world economy but has yet to assume responsibility for the global economic order. Quite the contrary, the country frequently fails to adhere to the rules of the WTO and its own accession protocol to the organization. Nonetheless Trump's goals are fundamentally defective. The President wants to ‘decouple’ the US from China, or in other words, massively reduce the interdependence between the two countries. Not only will this strategy not work, the policies of the President are dangerous and could easily backfire. Trump's tariff war has already taken its toll both in the US and globally. While China has made some concessions, none of these are legally binding. Any US-China deal is unlikely to address the underlying problems, rooted in China's economic model. What's more, it will not end the competition between the two superpowers for dominance in the international system. Top Keywords Trade War, US, China, India, Impact, Superpower, Global Reputation, Trade and Tariff Deficit, Developed and Developing Economies, Economic Dominance etc. Top |