What is the image of war words in your mind? Running missiles with guns, firing tanks and fluttering missiles
But now we are hearing about a new type of war. The world that says ‘trade war’ i.e. ‘trade war’
What is that trade war, which has created the threat of inflation versus the United States vs. balance and the entire world?
Even India, which is considered a partner of America, has come out against America in the face.
This ‘trade war’ is the product of conservationist economic policies, the most recent of which is the policies of US President Donald Trump.
The weapons of this war are all around you. Food items, water glasses, cupboards placed in your house, and the phone you are reading this story can also be the weapon of this war.
Background of war: recent incidents
President Donald Trump had won the election with the promise of ‘First America’. In simple language it means that the protection of US interests is the first and the worry of the country and the world afterwards.
According to senior economic journalist Sushma Ramachandran, the Trump Administration believes that the inadequate availability of foreign products in the US has affected their own industries and jobs and has increased trade deficit there. When the country’s import expenditure exceeds the total exports in its home, it is called trade deficit in the language of economics i.e. trade deficit.
Therefore, the US increased import duty on steel and aluminum a few days ago. With this, steel and aluminum sold in China and the rest of the country became expensive and both of their purchases and profits were reduced.
China and the EU also responded in the same language and increased import duty on many American items in their market.
Read: India counterattack against Trade war of America
Since the opposite effect of new rates on US steel aluminum was to be incurred on India, India also increased the import duty on agriculture products like apples, almonds, walnuts and choppers from 20 to 9 0%. On the first almond, import duty of 35 rupees per kg was now increased to 42 rupees per kg.
Now the United States has threatened to increase imports duty on many more items, which will have a bad effect on China and European countries.
Alok Puranik, associate professor of commerce at Delhi University, says, “Trump says that outsiders sell more of goods and we can not sell them as much as the in-charge imposes heavy taxes on their goods. If they make their goods expensive in the country, their goods will be sold less, in such a situation, the difference between profits between the two sides will be reduced, ie, to the USA At least it has to be imported and it will be able to export maximum to the countries which it wants to import. ”
Read: Trade war: Apple, almonds and cigarettes will not be cheap
Its effect: ‘From Atlantic to Hind, inflation will increase’
Sushma Ramachandran says that America is right in its logic because she has actually been imposing very little import duty here. Whereas other countries, for example, impose considerable duty on their imports, because there is a policy of keeping their industries in aid.
But Sushma does not solve the import duty, but says the danger.
According to him, “Americans have a habit of living in the cheap import duty environment, and because of competition, they have been getting cheap things, inflation is low and therefore demand is high.” It is not in the interest because those things which were previously cheap there, will now become expensive and the impact will be there first on the pockets of the people. ”
She says that since the rest of the country is also increasing import duty on US products sold in response, inflation will also come here. For instance, apple and almonds are going to be expensive in India.
Read: Who will be beaten in this war of America and China?
‘The idea of globalization, according to convenience’
Globalization has given the opportunity to cross the border and do business. The economies of the countries have not been untouched by each other.
The experts believe that the idea of increasing import duty is theoretically against globalization. The United States is pushing the rest of the country with its policies as protectionist policies and reducing the sea water of competition.
Alok Puranik, associate professor of commerce in Delhi University, views the idea of globalization dependent on the arbitrariness of large countries.
He says, “US cars, American bikes sell in India, if US companies benefit from it, then you should call it globalization. But if India or China sells cheap goods there, then you say it is an attack on our interests. The story has hit the interests of all. ”
Explaining the immediate effect of this trade war, Alok mentions the condition of the archaeological markets.
He says, “You see that all the world’s stock markets have fallen in the past week, this uncertainty is harmful to the global economy. If this trade war has increased and there is a problem in the economic relations between the two countries, then certainly China’s goods Will not find a market in America. ”
“It can also affect the fact that there is a possibility of factories shutting down in China or the employment of workers is affected. Similarly, consumers in the US will not get cheap and potentially good goods in China.”
Small business enterprises and employment
Economist Arun Kumar explains that if America is such a big economy it can have an impact on the production of all countries. Increasing production, inflation and unemployment may have an impact on these people’s happiness.
Sushma recalls that President George Bush had increased the import duty even during his tenure. With this, steel and aluminum in the US became expensive and the loss of it was that smaller industries there could not buy them and were closed.
It also took away certain jobs and then the Bush government had to withdraw the decision.
Between 2000 and 2016, approximately 50 thousand people in the US steel industry lost their jobs
‘The rest of the world will come closer’
Economist Arun Kumar also points out a different aspect. He says that if this situation of America versus the remainder continues for some days, economic relations between the rest of the countries will improve.
He explains, “If India raises import duty on apples coming from the US, it may be that apple or more than Australia or Europe now, the trade with America will be less, but trade may increase with the rest of the rest of the country. If the rest of the country has increased the import duty on US goods and we can export those goods, then our exports may also increase. ”
What did India do, right?
According to the Alok Puranik, this battle originally belongs to China and America.
He says, “This is the battle of elephants and India is not a rat too.” India’s presence is only symbolic in this scenario. India has increased the import duty on apple by giving a reply to the US, whose cost is India, Duty will be achieved, $ 2.4 million, there is no huge amount for the economy like India. ”
He believes that it has only symbolic significance in the US-India relations. But the impact of the war on China and USA is affecting the whole world.
Sushma’s opinion is that India has axed its feet by increasing the import duty on things like apples, almonds and walnuts.
She said, “It was supposed to be done thinking and it would have an impact on the pockets of the common people. India should have stood with the rest in the battle of America versus the remainder, but fight it on the stage of the WTO Should have waited for a cheap import duty in the entire world. Our Commerce Ministry should have waited a little longer. ”
Was it really necessary, Mr. Trump?
The question is whether the circumstances in the USA were such that the trump was forced to build a wall in the economy? Professor Arun Kumar does not keep this inconceivable.
He explains, “After the financial recession of 2008, the economic situation of the US was shaky, unemployment increased, but the situation began to improve once the last term of former President Barack Obama was over one year ago. It’s good. The rating of Trump has also increased. ”
Arun Kumar sees the roots in Trump’s election campaign.
According to him, “In his election campaign, Trump made many such promises which were based on protectionist economic policies, he talked about saving his jobs and his wealth. He said in a way that we have become piggy bank for countries like China. In this way they influenced the artisans there, and now they are indicating that they are made on their election promises of ‘America’s First First’. ”
Alok Puranik says that both China and USA are mature economies. Since its impact is on both the countries, they know the extent to which to carry this business war.
He says, “I feel that both the countries will come to the negotiating table and decide what to do to reduce trade deficit. I do not think this trade war will go a long way.”
According to the Alok Puranik, the United States wants the rest of the country to reduce the import duty on American goods sold, and if they do not do so they will have to face heavy import duty in the US. In order to make pressure in this regard, he started this war.