What happened?
The United States and China have agreed to roll back tariffs on each other’s goods for an initial 90-day period, following trade negotiations in Geneva. In a joint statement, both sides acknowledged “substantial progress” in their discussions. By May 14, the US will lower its tariffs on Chinese goods from 145% to 30%, while China will reduce its tariffs on American imports from 125% to 10%. The two countries have also established a mechanism for continued discussions on economic and trade relations, led by Chinese Vice Premier He Lifeng, US Treasury Secretary Scott Bessent, and US Trade Representative Jamieson Greer.
Why it matters to India
A potential US-China trade deal could have mixed implications for India. Previously, trade tensions between the US and China had presented opportunities for India, as US buyers sought Indian suppliers. However, a reduction in tariffs could enable China to recover lost ground due to its technical capabilities. Indian exporters have reported that some Chinese exporters have approached them for assistance in fulfilling US orders. While some experts suggest that sustained high tariffs on China would benefit emerging markets like India, a near-term easing of US-China tensions could pose challenges. India’s manufacturing sector faces limitations in meeting US demand in certain sectors, such as non-leather footwear, where China has a competitive edge.