US-China Tensions Open Trade Opportunities for India and Japan

Amid US-China trade tensions, India and Japan stand to gain favorable US trade deals. However, these nations remain cautious not to jeopardize their Chinese trade relations. The Trump administration's strategy to isolate China faces challenges as many countries increasingly view China as a primary trading partner.

As trade tensions between the United States and China escalate, countries such as India and Japan could benefit from more advantageous trade agreements with the US, a recent report from Jefferies suggests. The analysis indicates that Japan and India might secure better trade deals than previously possible, yet they are unlikely to accept terms compromising their extensive trade with China.

Jefferies emphasized that although these nations might exploit current tensions to strike favorable deals with the US, they are wary of undermining their relationship with China, especially after Beijing pledged retaliation against any country agreeing to a US trade deal detrimental to Chinese interests. This underlines China's resolute approach amid escalating trade disputes.

The Trump administration appears keen on marginalizing China by fortifying trade ties with countries like Japan and India. However, the report casts doubt on this strategy's efficacy, as numerous nations, according to IMF data, prioritize trade with China over the US. By 2024, China had become the top trading partner for 143 countries, accounting for 71% of global trade preferences.

Moreover, 107 countries were found to trade more than twice as much with China compared to the US, a significant increase from 2001 figures of 22% and 11%. This stark contrast illustrates China's emergence as a global trade powerhouse, complicating US efforts to isolate it merely through diplomacy. Nonetheless, India and Japan might carve out better deals through the ongoing trade dispute.

(With inputs from agencies.)