US-China Trade War: Economic Implications on South Asia

Abstract

The bilateral US-China trade conflict has profoundly altered the Trade features of the entire global economy and bring prospects and risks for the South Asian region. This article aims to examine the complex effects of the trade war on the concerned area: The first section provides a background of the trade war; when it started and the main conditions of the war, which are tariffs, trade deficit, restrict ions on technology, and countermeasures. It situates the South Asia’s economic relationship mapping of countries like India, Bangladesh, Pakistan and others discussing their trading partners with US and China and presence as a supply chain node. Trade effects are discussed, emphasizing trade diversion, which promoted exports in textiles and electronics; other effects relate to potential growth of the FDI as a result of where companies turned away from China. However, problems such as supply chain disruptions, and reliance on Chinese imports were witnessed as some of the main bottlenecks. These are geopolitical shifts, assertiveness/engagement of South Asia in the Indian Ocean strategy/Indo-Pacific strategy and increments in regional commerce through SAFTA apart from issues affecting the region such as inflation, volatility of currencies, and competition between SAFTA members. It gives more specifics by the country such as technology and pharma industries in India, textiles in Bangladesh, and economic issues of Pakistan in terms of CPEC. It reinforces the need for regional integration all through SAARC and BIMSTEC, the policies to be formulated for infrastructure growth, and with world bodies like WTO. With strategic recommendations at its end, it focuses on removing structural constraints and realizing opportunities that would help South Asia become a competitive region in global trading system in the post-trade war scenario.