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Current Affairs

US-China trade deal

Date: 12 October 2019 Tags: Miscellaneous


The United States and China have agreed to the first phase of a deal to end the trade war. This has prompted President Trump to suspend the tariff hikes imposed on China.



This is one of the biggest step toward resolution of a 15-month tariff war between the world's two largest economies that has hit financial markets and slowed global growth.



  • The accord contains provision for agriculture, currency and some aspects of intellectual property protections, which is expected to normalise relations up to certain extent.

  • Mr. Trump has also agreed not to proceed with a hike in tariffs to 30% from 25% on about $250 billion in Chinese goods that was supposed to have gone into effect.

US-China tariff wars

  • The China–United States trade war was an ongoing economic conflict between the world’s two largest national economies, China and the United States.

  • President Donald Trump in 2018 began setting tariffs and other trade barriers on China with the goal of forcing it to make changes to "unfair trade practices".

  • Among those trade practices and their effects are the growing trade deficit, the theft of intellectual property, and the forced transfer of American technology to China.

  • In the United States, the trade war has brought struggles for farmers and manufacturers and higher prices for consumers.

  • In other countries it has also caused economic damage, though some countries have benefited from increased manufacturing to fill the gaps.

Effect on India

  • India could increase its trade footprint in the midst of the US-China trade conflict, particularly under categories on which Washington has imposed tariffs on Beijing.

  • Diversion in investment flows is an opportunity that India could benefit from, as manufacturers seek alternative origination destinations away from China.