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Trade war helps Indian exports

India’s exports to the US in the first half of 2019 increased. This was mainly due to the trade war between the US and China. The US tariffs on China resulted in India gaining in additional exports to the US in the first half of 2019 by selling more chemicals, metals and ore, electrical machinery and various machinery as well as increased exports in areas such as agri-food, furniture, office machinery, precision instruments, textiles and apparel and transport equipment.

The trade war has resulted in a sharp decline in bilateral trade, higher prices for consumers and trade diversion effects -- increased imports from countries not directly involved in the trade war. These trade diversion effects have brought substantial benefits for Taiwan, Mexico and the European Union. Trade diversion benefits to Korea, Canada and India were smaller, but still substantial. The remainder of the benefits was largely to the advantage of other southeast Asian countries.

Tariffs imposed by the United States on China are economically hurting both countries. Consumers in the US are bearing the heaviest brunt as their associated costs have largely been passed down to them and importing firms in the form of higher prices. And it is not only final consumers, but importers of intermediate products — firms which import parts and components from China.