US-China 90-Day Tariff Truce: Reasons, Rollbacks and Economic Implications
13-05-2025
04:29 AM

What’s in Today’s Article?
- US-China Tariff Truce Latest News
- Background - Tariffs Between the US and China
- Rationale Behind the Imposition of Tariffs
- Current US-China Trade Situation After the Truce
- Conclusion
- US-China Tariff Truce FAQs

US-China Tariff Truce Latest News
- The United States and China have agreed to a 90-day pause in their trade war following two days of high-level talks in Geneva.
- Both countries will suspend the high tariffs and non-tariff barriers imposed since April 2. In a joint statement, they expressed commitment to resolving their trade disputes.
Background - Tariffs Between the US and China
- Since February 1, the US began imposing tariffs on China, initially citing the sale of fentanyl—an opioid linked to numerous overdose deaths in the US—as the reason.
April 2 Tariff Hike – “Liberation Day”
- On April 2, designated by President Trump as “Liberation Day,” the US significantly increased tariffs, imposing an additional 34% on Chinese imports.
China's Response
- China retaliated with its own set of counter-tariffs, a move that differed from most other countries' reactions.
Further Escalation
- By April 10, tariffs had escalated to extreme levels:
- US tariffs on Chinese goods: 145%
- China's tariffs on US goods: 125%
- This meant a $100 Chinese product would cost $245 in the US after tariffs.
Non-Tariff Measures by China
- Apart from tariffs, China implemented non-tariff barriers such as:
- Export restrictions on rare earth minerals
- Regulatory actions and investigations against several US companies

Rationale Behind the Imposition of Tariffs
- Concern Over Trade Deficit
- The US Trade Representative cited the $1.2 trillion trade deficit in goods as a primary reason.
- This figure reflects that US consumers import significantly more than what is exported to the rest of the world.
- Perception of Unfair Trade Practices
- The Trump administration views the trade deficit as a sign that the US is being ripped off by other countries, which:
- Protect their domestic companies
- Provide subsidies to help them outcompete American firms in the US market
- The Trump administration views the trade deficit as a sign that the US is being ripped off by other countries, which:
- Rise in Trade Deficit Since 2020
- Experts noted that the trade deficit had grown by over 40% since the end of Trump’s first term, reinforcing the administration’s concern.
- Justification for Tariffs
- Past efforts such as negotiations and diplomatic requests to open foreign markets had failed.
- Hence, the administration viewed high tariffs as the most logical and necessary solution to protect US interests.
Current US-China Trade Situation After the Truce
- Reduction in Base Tariffs
- Following the truce, both countries have reduced their base tariff rates to 10% on each other’s imports.
- Additional US Tariff on Fentanyl
- The US still imposes an additional 20% tariff specifically due to fentanyl smuggling concerns.
- Effective US tariff on Chinese imports: 30%
- Effective Chinese tariff on US imports: 10%
- Suspension of Non-Tariff Barriers by China
- China has suspended all non-tariff barriers introduced after April 2, including export restrictions and company investigations.
Reasons Behind the US-China Trade Truce
- Tariffs Hurt Consumers More Than They Help
- While tariffs protect domestic producers, they raise prices for all consumers, making them a counterproductive tool for addressing trade imbalances.
- The economic pain on consumers is widely spread, while the benefit to producers is narrowly concentrated — creating a misleading perception of overall benefit.
- Rising Prices and Economic Strain
- Tariffs made all imports more expensive, increasing the cost of living and squeezing household budgets.
- This led to price pressure across the US economy, including retail giants like Walmart, where the risk of empty shelves became real.
- Economic Contraction and Recession Risk
- The US economy contracted in the first quarter of 2025, even before the full impact of the tariffs could be felt.
- Economists widely predicted a recession, defined as two consecutive quarters of negative GDP growth.
- Threat of Stagflation
- With rising prices due to tariffs and a slowing economy, the US was increasingly at risk of stagflation—a dangerous mix of economic stagnation and high inflation.
Conclusion
- Despite the positive sentiment, this is not a final trade agreement. It is merely a 90-day truce to begin negotiations and de-escalate tensions.
- There is no clarity on who initiated the Geneva talks, suggesting that deep mistrust remains.
- The upcoming negotiations are expected to be complex, tense, and potentially difficult, with no guaranteed outcome.
US-China Tariff Truce FAQs
Q1. Why did the US and China impose tariffs?
Ans. To address trade imbalances and perceived unfair trade practices that hurt domestic industries.
Q2. What triggered the April 2 tariff hike?
Ans. The US increased tariffs significantly, branding it “Liberation Day” in response to fentanyl-related concerns.
Q3. How high did the tariffs reach?
Ans. US tariffs hit 145% and Chinese tariffs 125%, sharply raising the cost of traded goods.
Q4. Why was a truce reached now?
Ans. Escalating economic pain, consumer inflation, and recession fears forced both countries to seek temporary relief.
Q5. What happens during the truce?
Ans. Tariffs are reduced, non-tariff barriers suspended, and negotiations initiated for long-term solutions.
India’s Strategic Doctrine: PM Aligns Anti-Terror Policy with Global Framework
13-05-2025
04:27 AM

What’s in Today’s Article?
- India Strategic Doctrine Latest News
- India’s Evolving Anti-Terror Doctrine
- Other Highlights of the Speech Delivered by PM Modi
- India Strategic Doctrine FAQs

India Strategic Doctrine Latest News
- PM Modi addressed the nation for the first time after Operation Sindoor, India’s most intense military action since Kargil. During his address, he outlined a new anti-terror doctrine.
- Building on the precedent set by the Uri and Balakot strikes, the doctrine is based on three pillars:
- India will respond to terrorism on its own terms;
- Nuclear threats will not deter India from acting;
- There will be no distinction between terrorists, their leaders, and the states that support them.
India’s Evolving Anti-Terror Doctrine
- Following Operation Sindoor, PM Modi announced a significant shift in India's counter-terrorism policy.
- Building on the precedents set by the Uri surgical strikes (2016) and the Balakot airstrikes (2019), the new doctrine signals a bolder and more aggressive stance.
Three Core Principles of the New Doctrine
- Response on India’s Terms: India will choose the timing, nature, and scale of its response to terror attacks.
- No Tolerance for “Nuclear Blackmail”: India will not be deterred by Pakistan’s nuclear posturing.
- No Distinction Between Terrorists and State Sponsors: There will be no separation between terrorists, their masterminds, and the governments supporting them.
New Normal in India’s Response to Terror
- Operation Sindoor is positioned as a benchmark and a new standard in India’s fight against terrorism.
- This lowers the threshold for future Indian military responses and projects a higher degree of offensive readiness.
Framing India’s Fight in the Global War on Terror
- PM Modi linked India’s actions to the global anti-terror campaign, comparing the strikes against Jaish-e-Mohammed and Lashkar-e-Taiba to global responses to terror after 9/11.
- This positions India as a global stakeholder in counter-terrorism.
India’s Military Superiority Highlighted
- The PM praised India’s technological edge, highlighting the destruction of Pakistani drones and airbases using advanced air defence systems and precision missile strikes.
- He also highlighted India’s ability to strike deep inside Pakistan, damaging key airbases and exposing Pakistan’s vulnerabilities.
Decision to Pause: A Strategic Choice
- PM Modi defended the decision to halt military action after achieving key objectives, citing Pakistan’s appeal through diplomatic channels and its pledge to de-escalate.
International Messaging: “This is Not the Era of Terrorism”
- To counter accusations of war-mongering, Modi invoked his now-famous phrase, “This is not the era of war,” and adapted it: “This is also not the era of terrorism.”
- He called for global unity and zero tolerance against terrorism for a safer world.
Firm Red Lines on Talks with Pakistan
- India reaffirmed its long-standing position:
- No talks with Pakistan unless they are about terrorism and PoK.
- Terror and talks, trade, or even water cannot go together.
Other Highlights of the Speech Delivered by PM Modi
- Operation Sindoor: A Symbol of Justice
- Operation Sindoor is more than a military campaign — it symbolizes national resolve and emotional unity.
- PM described it as India’s commitment to justice after the Pahalgam terror attack.
- Suspension, Not Withdrawal
- Following heavy losses, Pakistan sought de-escalation. India agreed to suspend action after destroying major terror infrastructure, but Modi made it clear that future actions depend on Pakistan’s conduct.
- Full Freedom to Armed Forces
- Modi emphasized that Indian armed forces were given a free hand to act.
- Operation Sindoor now stands as a new counter-terrorism policy, showcasing India’s growing military independence and strategic assertiveness.
- Strong Message to Pakistan
- India reiterated its policy:
- No talks with Pakistan unless focused on terrorism or PoK.
- No trade or water-sharing under terror threats.
- Pakistan must dismantle its terror infrastructure or face destruction.
- India reiterated its policy:
- Peace Through Strength
- On Buddha Purnima, Modi invoked Lord Buddha’s message of peace, emphasizing that power is essential to protect peace.
- He said a strong India is critical to achieving Viksit Bharat (Developed India).
- Mastery of Modern Warfare
- India demonstrated 21st-century warfare capability in Operation Sindoor.
- Modi lauded the effectiveness of Made-in-India weapons and projected India as a future-ready military power.
- He reiterated that unity and zero tolerance for terror are India’s guiding principles for global peace.
India Strategic Doctrine FAQs
Q1. What is India’s Strategic Doctrine about?
Ans. It outlines India's long-term approach to counterterrorism, aligning with global anti-terror frameworks while safeguarding national interests.
Q2. How does the doctrine affect India’s foreign policy?
Ans. It prioritizes international cooperation on counterterrorism, enhancing India’s global influence and partnerships with strategic allies.
Q3. What changes are expected in defense operations?
Ans. India’s defense forces will adopt integrated strategies combining surveillance, intelligence, and surgical operations to combat terrorism.
Q4. Why is global alignment important in this doctrine?
Ans. Global alignment ensures intelligence sharing, cross-border coordination, and better response to global terror threats.
Q5. How will this impact India’s internal security?
Ans. The doctrine strengthens internal surveillance and intelligence networks, boosting preparedness against domestic terror activities.
India’s Role in Global Shipping Emission Reforms: A Turning Point
13-05-2025
05:14 AM

What’s in Today’s Article?
- Shipping Emissions Latest News
- Introduction
- The Evolution of the Emissions Framework
- The Geopolitical Dynamics
- Significance of Green Transition in Shipping
- India’s Strategic Advantages
- Conclusion
- Global Shipping Emissions FAQs

Shipping Emissions Latest News
- Recently, the 83rd session of the International Maritime Organization’s Marine Environment Protection Committee, at IMO Headquarters in London.
Introduction
- In a landmark move towards tackling climate change, the International Maritime Organization (IMO) has moved closer to implementing a Market-Based Measure (MBM) framework for reducing global shipping emissions.
- This comes after a decade of intense negotiations. India, alongside Singapore, played a crucial role in formulating a consensus-driven solution during the IMO’s 83rd Marine Environment Protection Committee (MEPC-83) session.
- This initiative marks a significant step in regulating emissions from the global shipping sector, which accounts for nearly 2.8% of worldwide greenhouse gas (GHG) emissions, making it the sixth-largest emitter if treated as a nation.
The Evolution of the Emissions Framework
- At the MEPC-83 session, five proposals were presented:
- International Chamber of Shipping: Proposed a fixed levy per tonne of CO₂ emitted.
- China: Advocated for a market-driven approach allowing ships to trade compliance units.
- European Union: Suggested a fixed GHG levy managed by an IMO-administered fund.
- India: Proposed a 'bridging mechanism' that penalizes under-compliant ships and rewards those using Zero or Near-Zero (ZNZ) fuels.
- Singapore: Built upon India’s model, suggesting a GHG Fuel Standard (GFS) with tiered incentives.
- Ultimately, Singapore’s hybrid model, inspired by India’s proposal, was approved with a 63-16 vote.
- However, the decision is pending final ratification under the MARPOL convention’s Annex VI amendment process.
The Geopolitical Dynamics
- The discussions saw sharp divides:
- Oil Exporting Nations (Saudi Arabia and Others): Opposed significant reforms to protect fossil fuel markets.
- Small Island Nations and Least Developed Countries: Demanded steep carbon levies to fund green development.
- China and Other Major Shipping Nations: Favoured minimal levies to remain competitive.
- Scandinavian Countries: Advocated for rewards for their early investments in decarbonization.
- Brazil: Pushed for methanol as a primary marine fuel.
- Despite these differences, the adoption of the MBM framework has set a powerful precedent, even though scepticism remains among shipowners, especially in Greece.
Significance of Green Transition in Shipping
- Though often invisible to consumers, the shipping industry is a major contributor to global emissions. Without immediate reforms, emissions from this sector could rise by 50% to 250% by 2050.
- To align with the UN’s Sustainable Development Goals and the Paris Agreement, the IMO introduced several measures:
- Energy Efficiency Design Index (EEDI)
- Ship Energy Efficiency Management Plan (SEEMP)
- Mandatory Fuel Oil Consumption Reporting
- By 2030, the IMO targets a 40% reduction in carbon intensity compared to 2008 levels, aiming for net-zero emissions by 2050.
India’s Strategic Advantages
- While the new emission levies may increase India’s maritime logistics costs marginally (up to 7.29% on imports and 8.09% on exports by 2030), the long-term benefits outweigh the short-term challenges.
- Key opportunities for India:
- India’s coastal fleet remains unaffected as the MBMs apply only to international shipping.
- India spends about $400 million annually on fuel for its international fleet, projected to rise by just $108 million by 2030 under the MBM, manageable considering the economy's scale.
- India is poised to become a global leader in green hydrogen exports through its National Hydrogen Mission. Companies like Reliance, Adani, and JSW are heavily investing in this sector.
- The IMO’s framework aligns perfectly with India’s clean fuel targets. Indian green hydrogen meets IMO’s emission standards, opening lucrative markets for export.
Conclusion
- The adoption of the MBM framework marks a transformative moment for the shipping industry.
- It not only addresses a critical sector in the global fight against climate change but also opens up vast economic opportunities for India in green energy exports.
- If fully implemented, this could make global shipping the first truly regulated sector under binding climate goals, setting an example for others to follow.
Global Shipping Emissions FAQs
Q1. What is the Market-Based Measure (MBM) framework?
Ans. It is a new global policy to reduce shipping emissions through financial penalties and rewards, promoting the use of clean fuels.
Q2. How did India contribute to the IMO’s new emissions policy?
Ans. India proposed a balanced emissions framework that influenced the final hybrid model adopted by the IMO.
Q3. How will the new framework impact India’s economy?
Ans. It will have a modest short-term cost impact but offer significant long-term benefits through green fuel exports.
Q4. What is India doing to leverage this opportunity?
Ans. India is heavily investing in green hydrogen production and aims to become a global hub for clean energy exports.
Q5. Why is the shipping industry crucial for climate action?
Ans. Shipping contributes nearly 2.8% of global emissions; without reforms, these emissions could increase by 250% by 2050.
Source: TH