China-US Trade War 2.0: How Trump Tariffs Might Cut Costs on Your Next TV, Fridge, or Phone

China-US Trade War 2.0: The world is on edge because of tariff slugfest between United States President Donald Trump and Chinese President Xi Jinping, but the situation is likely to bring cheers for Indians planning to buy new TV, fridge, smartphones and other appliances.

Concerned due to the tariff war with the US, Chinese electronic components manufacturer are offering to sell their products with a 5% discount as Indian companies are planning to switch their supplier. This could favour Indian manufacturers as they could reduce their costs by purchasing components at a discounted price, reported Economic Times on Thursday. Indian companies may also pass on the discount availed from Chinese manufacturers to consumers to stimulate demand, the report added citing sources.

The 5% discount by Chinese electronic component manufacturers is a huge drop as per the industry standards because the segment functions on a low price margin of 4-7%. Which means that Indian manufacturers can benefit from the situation arising out of US-China trade tensions.

How India Will Benefit From Trump Tariff War?

Chinese Manufacturers will be under pressure as export orders from US will slow down, hence, prices will be renegotiated, Kamal Nandi, head of the appliance business at Godrej Enterprises Group told Economic Times.

Indian manufacturers who are renegotiating their trade deals with Chinese firms may pass on the discounted rates to Indian customers to boost demand for electronics in the country, ET cited Avneet Singh Marwah, chief executive of television contract manufacturer Super Plastronics in its report.

US-China Trade Tariff war

Donald Trump announced trade tariffs on multiple countries, including India, Canada, UK, China, and Japan on April 2. Manufacturing focused nations like China and Vietnam were the worst hit due to the announcement as Donald Trump increased tariffs on them to as high as 35%. Donald Trump on April 2 announced that the US would impose 34% tariff on Chinese imports, totalling the percentage of US tariffs on Chinese goods to 54%. While, the US clarified that it is open for negotiations on tariffs, China strongly condemned Trump trade tariff announcement and announced to impose 34% additional tariffs on US imports.

The US-China trade tariffs slugfest went murkier when, Donald Trump on April 8, further increased levies charged on Chinese imports to 104%. China retaliated by imposing 84% taruff on all US goods and maintaining its stance that it will "fight till end".

Hours before announcing tariffs on US goods on Wednesday, China had also mentioned its commitment to resolve the trade dispute with negotiations in its white paper titled 'China's Position on Some Issues Concerning China-U.S. Economic and Trade Relations'.

"In response to the U.S. moves, China has taken forceful countermeasures to defend its national interests, and has remained committed to resolving disputes through dialogue and consultation, with multiple rounds of consultations with the U.S. side to stabilize bilateral economic and trade relations, according to the document," read a press release by People's Republic of China.

Trump Tariffs Impact on Domestic Appliances Industry

Trump tariffs and consequent China-US trade conflict will have larger implications on the Indian economy. Several sectors like chemical products, fertilisers, metal, machinery, hotels, automobiles, information technology, etc will be adversely affected. Whereas, sectors like personal consumption items, domestic appliance, electricity, railway, storage, etc are likely to show high responsiveness to higher government spending amid adverse trade environment, said Systematix Institutional Equities in its report.