In light of the recent slew of US sanctions targeting the Chinese semiconductor industry, comment on the trade war between USA and China. What are the implications for the global economy?

The United States has recently passed an act, which forbids the US companies to export critical chip manufacturing tools to China, and also banned the US citizens and companies from supporting Chinese companies in advanced-chip making.

Trade war between US-China:

• There has been a rise in protectionist tendencies all around the globe, especially emboldened by the US-China trade war.
• The USA’s tough export regulations have a purpose of strengthening its domestic industry and arresting the growth of China’s semiconductor industry. Hence, maintaining the hegemony of the US.
• These trade wars or having adverse impact on the new liberal world order, based on social democratic principles for a global public good.
• The rise of China is going to be a challenge for the world, especially in India.

Consequences:

• It is a move against competitiveness.
• It will negatively impact the reliability of the global trading and financial orders.
• It can lead to retaliation from the Chinese side as well. 
• It is a kind of neocolonialism, with an aim to achieve supremacy.
• It will have negative consequences on global partnerships.
• China may use it as an excuse for targeting Taiwan.
• It will further disrupt the global supply chain.
• The uncertainties in the global trading system will rise.
• It will reduce global cooperation.
• It will adversely impact the fight against climate change, Pandemic, etc.

Conclusion:

These sanctions will have wide consequences and definitely will not go well for the rest of the world. Such steps anywhere in the world will reduce the room for diplomacy, discussion and trade.

Topics: GS-II: Developed Versus Developing Countries Indias Interests