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The Print
11-07-2025
- Business
- The Print
Tariff war because of economic imbalances between US & China—SBI report
It stated 'The tariff issue highlights the deeper economic imbalance between the U.S. and China'. The report noted that tensions between the United States and China are because of deeper rooted problems of global economic imbalances. China invests much more than it consumes, while the US consumes far more than it invests, leading to a sharp imbalance in global trade flows. New Delhi: The recent surge in the trade wars impacting global economy is due to the trade imbalances between the countries, according to a report by SBI Funds Management. As per the data quoted in the report, China's investment stands at 42 per cent of its GDP, while household consumption is only 40 per cent. In contrast, the US invests only 22 per cent of its GDP but has a very high household consumption rate of 68 per cent. India falls somewhere in between, with investment at 33 per cent of GDP and household consumption at 62 per cent. This imbalance has created a massive trade gap between the two countries which in turn has supported the trade wars between countries to reduce their trade deficits. The US runs an annual goods trade deficit of around USD 1,202 billion, while China enjoys almost equal surplus of USD 992 billion. India runs a trade deficit of USD 275 billion. The US also has a negative current account balance of -3.2 per cent of GDP, while China maintains a surplus of 1.4 per cent. In terms of savings, the US saves 18 per cent of its GDP, compared to 43 per cent in China and 33 per cent in India. This pattern shows that the US underinvests and overspends, while China over saves and over invests. Due to this imbalance, the US has become the world's largest absorber of surplus goods, resulting in rising levels of external debt, which now stands at USD 27.6 trillion. In comparison, China's external debt is only USD 2.4 trillion and India's is USD 0.7 trillion. The SBI Funds Management report highlighted that the US administration is looking to fix this imbalance impacting their economy. Measures such as tariffs are being used, and though any increase in tariffs is expected to be gradual through 2025, the report says the US could still use other legal tools to enforce trade measures. The Trump administration has also pushed for reducing America's dependence on China for manufactured goods and has raised serious concerns about the long-term sustainability of its debt levels. On the other hand, China is taking steps to reduce its reliance on the US, including reforms in cross-border payment systems and commodity exchanges. According to the report, this is not just a short-term conflict but a fundamental shift in the global economic order that may continue to evolve over the coming years. This report is auto-generated from ANI news service. ThePrint holds no responsibility for its content Also Read: Nationalisation to privatisation—what SBI, LIC and Air India tell us about public sector policy
India Gazette
11-07-2025
- Business
- India Gazette
Businesses globally are hesitating to take significant investment decisions due to geopolitical tensions and trade negotiation setbacks: Report
New Delhi [India], July 11 (ANI): Businesses across the world are hesitating to make significant investment decisions because of rising global policy uncertainty due to tariffs and geopolitical conflicts, according to a report released by SBI Funds Management. The report highlighted that the Global Economic Policy Uncertainty Index, which reflects concerns around global policymaking, has spiked to its highest level since records began in April 1997. The index, which is adjusted using current price GDP weights, shows a steep upward trend in recent months, especially in April 2025. The index has now crossed the 600 mark, signalling extremely high levels of uncertainty in the global economy. SBI's report points to a mix of global events and policy unpredictability as key reasons behind this trend. 'Global uncertainty remains elevated amidst geopolitical tensions and trade negotiation setbacks,' the report said. It noted that although there was some moderation in uncertainty recently, it still remains much higher compared to the past decade. One of the major concerns is how trade negotiations with key global partners will evolve. There is also uncertainty around possible retaliatory measures and whether the Supreme Court might invalidate some of the tariffs currently in place. The report further stated that the rise in uncertainty is making businesses cautious. Many firms are delaying or reconsidering their investment plans due to fear of adverse policy changes or geopolitical shocks. Key global events in recent years have added to this environment of doubt. The first round of the US-China trade war under President Trump, Brexit, the COVID-19 pandemic, the Russia-Ukraine war, and ongoing tensions in the Middle East have all played a role in pushing the uncertainty index higher. The report also mentioned that business sentiment deterioration is often accompanied with reduced capex activity. Government infra thrust is plateauing. It also added that this is coupled with threats of global growth moderation owing to tariff policies. It stated, 'Even if tariffs weren't to materialize in a meaningful way, the threat and uncertainty of it would dent the global business cycle'. The report concludes that unless there is more clarity in global policymaking and trade relations, businesses are likely to remain hesitant in taking bold investment steps. (ANI)
Time of India
11-07-2025
- Business
- Time of India
Slow US-China trade deal may push Trump's tariff deadlines; rare earth metal supplies may face disruption: Report
Slow US-China trade deal may push Trump's tariff deadlines Trade deals between the US and China are moving at a pace slower than expected, which may lead to extensions of the current tariff deadlines, according to a report by SBI Funds Management. The report highlighted deadlock amidst ongoing trade talks between both the nations with both sides showing limited progress in finalising a deal. The report points at a critical standby in global supply of rare earth metals which may get affected owing to China's domination in supplying 90% of the global capacity, reported ANI. China's dominance over rare earth metals could prove detrimental for global automobile industry, especially electric vehicle production in the US, Europe, and India. China on Tuesday responded to Trump administration's renewed tariff plans with warning of potential retaliatory measures. Beijing also indicated that it may also take action against countries that align with Washington's efforts to marginalize China within global supply chains. The warning was published as a part of an official commentary in People's Daily. The article called the US tariff strategy, labeling it 'bullying,' and argued that 'dialogue and cooperation are the only correct path', reported by Reuters. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Providers are furious: Internet access without a subscription! Techno Mag Learn More Undo The 90-day pause for trade negotiations which was initially set to end on July 9, has been extended to August 1. Trump has escalated trade tensions by sending tariff letters to more than 20 countries, warning that higher import duties will take effect from August 1, 2025 if bilateral trade deals are not reached. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
India Gazette
11-07-2025
- Business
- India Gazette
Tariff war is because of economic imbalances between countries: SBI Report
New Delhi [India], July 11 (ANI): The recent surge in the trade wars impacting global economy is due to the trade imbalances between the countries, according to a report by SBI Funds Management. The report noted that tensions between the United States and China are because of deeper rooted problems of global economic imbalances. China invests much more than it consumes, while the US consumes far more than it invests, leading to a sharp imbalance in global trade flows. It stated 'The tariff issue highlights the deeper economic imbalance between the U.S. and China'. As per the data quoted in the report, China's investment stands at 42 per cent of its GDP, while household consumption is only 40 per cent. In contrast, the US invests only 22 per cent of its GDP but has a very high household consumption rate of 68 per cent. India falls somewhere in between, with investment at 33 per cent of GDP and household consumption at 62 per cent. This imbalance has created a massive trade gap between the two countries which in turn has supported the trade wars between countries to reduce their trade deficits. The US runs an annual goods trade deficit of around USD 1,202 billion, while China enjoys almost equal surplus of USD 992 billion. India runs a trade deficit of USD 275 billion. The US also has a negative current account balance of -3.2 per cent of GDP, while China maintains a surplus of 1.4 per cent. In terms of savings, the US saves 18 per cent of its GDP, compared to 43 per cent in China and 33 per cent in India. This pattern shows that the US underinvests and overspends, while China over saves and over invests. Due to this imbalance, the US has become the world's largest absorber of surplus goods, resulting in rising levels of external debt, which now stands at USD 27.6 trillion. In comparison, China's external debt is only USD 2.4 trillion and India's is USD 0.7 trillion. The SBI Funds Management report highlighted that the US administration is looking to fix this imbalance impacting their economy. Measures such as tariffs are being used, and though any increase in tariffs is expected to be gradual through 2025, the report says the US could still use other legal tools to enforce trade measures. The Trump administration has also pushed for reducing America's dependence on China for manufactured goods and has raised serious concerns about the long-term sustainability of its debt levels. On the other hand, China is taking steps to reduce its reliance on the US, including reforms in cross-border payment systems and commodity exchanges. According to the report, this is not just a short-term conflict but a fundamental shift in the global economic order that may continue to evolve over the coming years. (ANI)
Time of India
11-07-2025
- Business
- Time of India
Tariff war is because of economic imbalances between countries: Report
SBI Funds Management reports trade imbalances fuel global trade wars. US-China tensions stem from differing economic models. China invests heavily, while the US consumes more. This creates trade deficits, with the US owing USD 1,202 billion and India owing USD 275 billion. The US seeks to address this imbalance through tariffs and reduced reliance on China. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads The recent surge in trade wars impacting global economy is due to the trade imbalances between countries, according to a report by SBI Funds report noted that tensions between the United States and China are due to deeper-rooted problems of global economic imbalances . China invests much more than it consumes, while the US consumes far more than it invests, leading to a sharp imbalance in global trade stated "The tariff issue highlights the deeper economic imbalance between the U.S. and China".As per the data quoted in the report, China's investment stands at 42 per cent of its GDP , while household consumption is only 40 per contrast, the US invests only 22 per cent of its GDP but has a very high household consumption rate of 68 per falls somewhere in between, with investment at 33 per cent of GDP and household consumption at 62 per imbalance has created a massive trade gap between the two countries, which in turn has supported the trade wars between countries to reduce their trade deficits The US runs an annual goods trade deficit of around USD 1,202 billion, while China enjoys almost equal surplus of USD 992 billion. India runs a trade deficit of USD 275 US also has a negative current account balance of -3.2 per cent of GDP, while China maintains a surplus of 1.4 per terms of savings, the US saves 18 per cent of its GDP, compared to 43 per cent in China and 33 per cent in India. This pattern shows that the US underinvests and overspends, while China over-saves and to this imbalance, the US has become the world's largest absorber of surplus goods, resulting in rising levels of external debt, which now stands at USD 27.6 trillion. In comparison, China's external debt is only USD 2.4 trillion and India's is USD 0.7 SBI Funds Management report highlighted that the US administration is looking to fix this imbalance impacting their economy. Measures such as tariffs are being used, and though any increase in tariffs is expected to be gradual through 2025, the report says the US could still use other legal tools to enforce trade Trump administration has also pushed for reducing America's dependence on China for manufactured goods and has raised serious concerns about the long-term sustainability of its debt the other hand, China is taking steps to reduce its reliance on the US, including reforms in cross-border payment systems and commodity to the report, this is not just a short-term conflict but a fundamental shift in the global economic order that may continue to evolve over the coming years.
