The trade war between the US and china has now temporarily ended. trump, who took office as US President, imposed a 145% tax on goods imported from China. In response, china also imposed the highest tax on goods imported from the US. This trade conflict between the US and china has caused instability internationally. The international economy has also come to a standstill. In this context, negotiations have been held between the US and china, and both countries have agreed to suspend this tax for 90 days. It has been reported that the tax on goods imported from china will be 30 percent for these 90 days. As for the US, most of the goods needed by the US and products for most US brands are manufactured in china and exported to the US. Due to the crisis given to American companies during Trump's first administration, a policy of china +1 was formed.
This policy forced all American companies that had manufacturing facilities in china to set up manufacturing facilities outside of China. During that period, many companies that had left china (including Apple) started investing in india, Vietnam, and indonesia to create new manufacturing bases. Suddenly, the trump administration imposed a 145% import tax on goods imported from china, and many American companies decided to completely abandon their factories in china and shift them to countries including india and Vietnam. Because the tariffs on goods imported from these countries were many times lower than those in China. Therefore, various multinational companies planned to shift their manufacturing facilities to other Asian countries. It is in this situation that a trade agreement has suddenly been reached between china and the United States. With this, the decision of 145% import tax on Chinese goods has been abandoned. But various US companies are saying that it is not possible to predict how long trump will keep his decision like this. Due to this, American companies are confused about whether to postpone or change their decision to shift their investments from china to other countries for the time being. Companies including apple have already started steps to increase their production in countries including india, leaving China. In such a situation, the change in tax rates has put all important decisions on hold. Countries including india, Vietnam, Thailand, and malaysia are already holding talks with the US regarding import tariffs. In this situation, multinational companies have temporarily postponed the decision to shift Chinese manufacturing plants to other countries. Since trump can make any decision at any time, especially taking any kind of action against china, it is said that multinational companies may adopt an approach of gradually shifting production centers in china to other countries instead of immediately shifting them to other countries.

This is considered a slight setback for countries like india, Vietnam, Taiwan, and Mexico, which had been hoping for a good opportunity due to the US-China trade conflict. However, it is expected that multinational companies will gradually move towards these countries as they have learned the lesson of not depending on a single country for their production.
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Sowmiya Sriram

13/05/2025 07:18 PM