US and China being at each other’s throats over trade practices has sent global markets into a tizzy. The tit-for-tat measures and counter-measures of imposing tariffs on each other’s goods have made the possibility of a trade war very real. It is a fact that the entire global trading system would be in jeopardy, if a trade war between the two happens. The Dollar Business looks into the possibility of a trade war, besides figuring out what is at stake for developing countries like India and the role institutions like WTO can play in the current situation.

By Aamir H. Kaki | March 2018 Issue | The Dollar Business

Donald Trump and his I, Me & Myself attitude, which he passes off as ‘America First’, has resulted in a series of unilateral measures which have sent chills down the spine of every businessman who does not happen to be American and even some that do. Never before has the POTUS been so unpredictable and rash. His ‘law-making’ tweets – be it the immigration ban on six Muslim nations, tweaking rules of H1-B visa programme, the border wall with Mexico or the recent juggernaut of ‘imposition of tariffs’ – have his perceived enemies as well as allies running for cover. In order to fulfil his election promise of ‘Making America Great Again’, President Trump has been targeting nations, with which US has a trade deficit, by imposing reciprocal tariffs, citing ‘security’ reasons. Trump’s latest bullying attempt focusses on China. The dragon, not one to back down from a fight, has reacted with its own set of tariffs for American products. This has caused much speculation on the possibility of a trade war amongst investors and has experts thinking that it might indeed be possible for one ...