The Next Global Slowdown?

The simmering trade tensions between the US and China have escalated into a full-blown war.

- M.G. Arun

It started after the US more than doubled tariffs on Chinese imports, with the latter retaliating by announcing new tariffs on American goods starting June 1. The trade war has shaken up stock markets worldwide, and with no signs of a de-escalation, market pundits are forecasting a global slowdown and even a recession if the impasse continues. Indian stocks have been under pressure, with the benchmark Sensex falling 2,000 points in nine days up to May 13.

On May 10, the US carried out its threat of hiking tariffs on $200 billion worth of Chinese goods (from the 10 per cent imposed earlier) to 25 per cent. As many as 5,700 products were affected. A day later, Washington threatened more tariffs on almost all of China’s exports. If implemented, an additional $300 billion worth of Chinese goods will be affected.