SBR:1 a policy of making United States

                                                SBR:1

 

 

              MACRO
ECONOMICS

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Submitted
by:                        

Sudhanshu
Mittal

CMM16115

 

President
Trump imposes high tariff on a range of products imported from china – 

IMAPCT ON CHINA-

United States President
Donald Trump slapped steep tariffs on imports of washing machines, solar energy
cells and panels from China on Monday (Jan 22). These announcements came
after a year on curbing imports of cheap products from countries such as China
and South Korea. The US said it will impose a 20% tariff on the first 1.2
million imported large residential washers from china in the first year, and a
50% tariff on machines imported from china thereafter. The tariffs decline to
16 per cent and 40% respectively in the next consecutive year. A 30% tariff imposed
on imported solar cells and modules in the first year, with a declining tariff
trend to 15% by the fourth year. The tariff imposed by Trump allows 2.5
gigawatts of unassembled solar cells to be imported tariff-free each year from
china. Trump has warned the traders of Aluminium, steel and other such products
from china that they could impose certain measures on imports from china. Trump
aims to come up with a policy of making United States inclined to “America
First” approach to control Non- American trade. This imposition of tariff
would adversely affect the trades from country such as china, therefore it
would have a direct and accelerated impact on the trade imports from the
imposing country as well (United States). China and other such nations are
adversely affected with their move of imposing such restriction and have
criticized this move of the US, so they have decided to move to the world trade
organization (WTO) to settle this trade dispute.

One of the main reason behind this move of imposing
tariff on Washing Machines and Solar cells and modules  by Trump was some companies approaching and
requesting Trump by saying that their operations in the United States were
being harmed by the imports of such from China. Economists have concerned Trump
Government with insights that this move would not only hamper relations even
more but would also have an impact on businesses in United States and also
affect the consumers. Companies such as Whirlpool requested for stopping imports
of Washing Machines from China. Also two solar companies namely Suniva and
Solar World Americas raised their voice that 
saying cheap solar cells and modules were putting their companies at
risk.

The US International Trade Commission (an independent
body) said that the imports were definitely hampering the domestic manufacturers,
this made Trump levy more stringent measures to curb the imports. China has
been in the loop of being cast out from US market by continuous measures for
many product and services so it still did not suffer majorly in the case of
solar cells and modules whereas other markets such as Malaysia and South Korea
which constituted of about 57% were struck majorly as the major share of
imports constituted products from there.

Ref: https://economictimes.indiatimes.com/img/62613217/Master.jpg/
International trade commission, Bloomberg New Energy Finance (As per Jan 23rd,2018)

The 23rd Jan,2018 was marked as China’s Yuan neared
25-month high against the US dollar on optimism over the country’s economic
performance. It is therefore, on the path of becoming the Global currency as a
result of its such exceptional performance. Market expectations were growing
over the potential success of President Xi Jinping’s structural reforms that
are aimed at achieving more sustainable, higher quality economic growth in
China soon. China’s economy expanded 6.9%, rising up for the first time in
seven years and well above the government’s annual target and expectation of
around 6.5 %. A weaker dollar has been contributing to the CNY’s outstanding
performance, despite enormous  growth
expected in the U.S. economy in 2018.

Ref: According to a report issued
by China International Capital Corporation.

IMPACT
ON INDIA-:

India’s solar power sector may benefit from Trump’s
decision on the 23rdJan,2018  to levy
tariff on imported solar cells and modules. As a result of this, India is
conducting an anti-dumping investigation on Solar cells and modules from China
and Malaysia. India is on route to levy a hefty 70% safeguard duty on the Solar
units from China and Malaysia. The PM of India raised this particular concern
in the speech at Davos, where he mentioned that Globalization doesn’t need that
much attention as its already in a perfect practice as everyone has now become
used to it, whereas now the concerns should shift to protectionism, resulting
in such tariffs. This decision is in line with Market Expansion. The tariffs
imposed by US may not have much impact on Indian Market, as the US does not
import much from China. Hence, this particular decision would only mean profit
for INDIA.

 

Impact
on UAE-:

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