Tensions between the United States and India have escalated, with India announcing retaliatory measures against U.S. President Donald Trump’s 25% tariffs on steel and aluminum imports. These tariffs are set to affect approximately $7.6 billion worth of Indian exports to the U.S., intensifying the ongoing trade war.
The Impact of Trump Tariffs on India
In March, the U.S. imposed a 25% tariff on steel and aluminum imports, impacting India, the world’s second-largest crude steel producer. In response, India notified the World Trade Organization (WTO) that these tariffs would hurt its $7.6 billion worth of exports to the U.S.
This move marks a significant escalation in the U.S.-India trade tensions, especially as the two countries were in discussions over a potential Bilateral Trade Agreement (BTA), which is expected to be concluded by July 8. The timing of these tariffs—set to kick in just before the agreement is finalized—has raised concerns about the future of trade relations between the nations.
The US-China Trade Deal and “China Plus One” Strategy
The trade war has taken another turn with President Trump announcing a “total reset” in the U.S.-China trade relationship, following the release of new details regarding the U.S.-China trade deal. While this move is seen as a positive development for U.S.-China relations, it poses challenges for India’s position in the global trade landscape.
India’s ability to attract companies looking to relocate from China—under the “China Plus One” strategy—may be compromised as Trump’s dialing back of tariffs on Chinese imports undermines the strategy. This shift in U.S.-China trade dynamics could threaten India’s competitive advantage as global firms may reconsider their relocation plans.
Crypto Market Unfazed by Trade Tensions
Despite the broader macroeconomic tensions, the cryptocurrency market has continued its upward trajectory. Bitcoin has bounced back, gaining 2% to $103,500, after a brief dip on Tuesday. Meanwhile, altcoins have experienced even more substantial gains, with Ethereum leading the pack with a 9% rise. Other top-performing altcoins such as XRP, Solana (SOL), Dogecoin (DOGE), and Cardano (ADA) have seen gains ranging from 4% to 10%.
As the U.S.-India trade tensions simmer and the U.S.-China trade deal evolves, the global economy will be watching closely for the long-term impact of these developments. Meanwhile, the crypto market remains largely unaffected, continuing its positive momentum.
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