Finepoint | US & China Are Decoupling In Real-Time: A Golden Opportunity India Must Not Miss
The timing of the visit couldn’t be more significant. The United States and China are locked in a full-blown trade war — and with no off-ramp in sight, the world is watching as the two superpowers brace for a long, bruising economic battle. The question is no longer if but who can endure more pain.
But where there’s disruption, there’s opportunity. For India, this could be a moment of profound economic realignment.
It all started on April 2 — dubbed “Liberation Day" by Donald Trump — when the US president rolled out a sweeping tariff package. Nations across the board, including India, were hit. India faced tariffs of 26%, while China was slapped with an additional 34%. Vietnam, Taiwan, and Japan were also on the list, with tariffs ranging from 24% to 46%. The goal? Strong-arm countries into slashing their tariffs on American goods and chip away at the US’s $1 trillion trade deficit.
But the world had other plans.
Markets tumbled, businesses panicked, and even Trump’s allies urged him to hold back, fearing a recession. China, however, didn’t flinch. It retaliated with its own 34% tariff hike on US goods, sparking a tit-for-tat escalation. Trump countered with a blistering 50% hike, taking the total tariff on Chinese goods to a staggering 104%. China then upped the ante, imposing an additional 84% — making it clear this was no longer about trade, but pride. Xi Jinping had decided to call Trump’s bluff.
By April 9, Trump was looking for a way out. To save face, he pulled a strategic switch: he raised tariffs on China even further, to 145%, citing its “lack of respect" — while slashing tariffs for over 75 other countries, including India, down to a baseline of 10% for 90 days. This trick, which China would later respond to with 125% tariffs, would make China look like a stand-alone fool that retaliated prematurely and ended up with the worst deal of all — all while masking the sting of Trump’s retreat.
The world let out a sigh of momentary relief. Trump had scaled back tariffs on day one........
© News18
