2018-2020 Trade War: What Happened?

The U.S.-China war started in July 2018 under President Donald Trump's administration. The United States imposed 25% tariffs on $34 billion worth of Chinese imports, prompting China to retaliate with similar tariffs on U.S. goods.

It began to address what the U.S. perceived as China's unfair trade practices. These included intellectual property theft and the requirement that U.S. companies transfer technology to Chinese partners in exchange for market access.

How 2025 Trade Escalated?

This year, in 2025, the trade war between the U.S and China escalated. President Trump increased tariffs on Chinese imports further, prompting China to retaliate again.

So here’s what the timeline for this escalation:

• February 1, 2025: The U.S. imposed a 10% tariff on all Chinese imports using the International Emergency Economic Powers Act (IEEPA).
• February 4, 2025:China responded with tariffs on U.S. goods, including coal and liquefied natural gas.
• March 4, 2025: The U.S. raised tariffs on Chinese imports by another 10%, reaching a total of 20%.
• March 2025: China imposed new tariffs on U.S. agricultural products, such as chicken and soybeans, in response to U.S. actions

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Trade War Comparison: Now vs Then

Initially, the tariffs in 2018 targeted specific categories such as aluminum and steel, with rates of up to 25%.

However, in 2025, it became much broader including all the Chinese imports at a uniform rate of 10%. The metal sector took a hit in the 2025 trade war.

When it comes to retaliation from both countries, back in 2018, China's tariffs measure was more targeted, focusing on automobiles and agricultural products. In 2025, they included a wide range of goods signaling the increased intensity in the trade tensions.

Comparing the overall global economic impact during the trade war, there is more similarity, such as:

• slowdown of global trade growth
• increased market uncertainty
• potential disruption in global supply chains
• Increased costs of consumers and businesses

The Impact Of US-China Trade War On India

India can benefit from increased exports to both the U.S. and China as enterprises seek to diversify their supply chains away from China. This will boost export opportunities in the nation.

Also, India is more likely to attract investment from international brands looking to relocate from China due to ongoing trade tensions.

On the other hand, this will also have some negative impact as this trade war results in global economic slowdown, affecting India’s export and overall economic growth.

Not to mention, this conflict already injected uncertainties in the Indian stock market, leading towards market volatility.

Investors need to wise up amid this global uncertainty and market volatility through diversifying their portfolio.

You can start this by investing in the best smallcase portfolios, such as PINC Momentum Fundamental, which offers promising smallcase returns.

Conclusion

Overall, this US-China trade war situation manifests in the Indian economy as both boon and curse, presenting some positive, as investment opportunities and negative as challenges.

Such situations often test the investors’ conviction in their portfolios and their grip on financial fundamentals. This warrants investors to diversify their portfolios across themes, choosing the best smallcase in India.

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