US-China Trade War De-escalates! How Will it Impact India?

In a significant breakthrough, the United States and China have agreed to slash tariffs on each other's goods for the next 90 days—marking a major de-escalation in their long-standing trade war. Following weekend trade talks in Geneva, US Treasury Secretary Scott Bessent confirmed that both countries will cut tariffs by 115% starting Wednesday.

This will bring US tariffs on Chinese imports down to 30%, and Chinese tariffs on US goods down to 10%. While the cuts are deeper than anticipated, experts caution that a 30% tariff remains high. Nonetheless, the global markets have responded positively—with the S&P 500 rising above pre-tariff levels seen before former US President Donald Trump first imposed a universal 10% tariff.

China Concerned, US Acknowledges Pressure

According to Beijing correspondent Laura Bicker, Chinese officials were increasingly worried about the domestic economic impact of the US tariffs. Scott Bessent, too, had admitted just last month that the ongoing situation was “unsustainable.”

Shipping Industry Welcomes Relief

Global shipping leader Maersk has called the move “a step in the right direction,” with shares soaring 12.9% by mid-morning. The company expressed optimism that this truce might evolve into a long-term trade settlement, bringing predictability for international commerce.

“Our customers now have 90 days of clarity with reduced tariffs, and we are working hard to help them make the best use of this window,” Maersk stated.

How Will It Impact India?

For India, the temporary truce could bring both challenges and opportunities. On one hand, reduced tariffs may restore confidence in global supply chains and lower input costs for Indian manufacturers who import from either the US or China. On the other hand, if the US and China resume large-scale bilateral trade, Indian exporters might face increased competition in sectors like electronics, textiles, and pharmaceuticals. Analysts say India must now focus on strengthening its own trade agreements and logistics capabilities to stay competitive.