[Arvind Subramanian] Sino-American trade war benefits China's rivals

US President Joe Biden and his predecessor Donald Trump are both taking tough stances on trade and China, with Biden imposing tariffs on Chinese-made electric vehicles and Trump vowing to impose tariffs on Chinese cars manufactured in Mexico. This could lead to a potential trade war that may have broader geopolitical implications. Other countries, especially developing economies, could benefit from these protectionist measures by gaining competitive advantages over Chinese firms. For example, India has attracted Western firms exiting China and has seen an increase in its solar panel exports due to these tariffs. However, the benefits of discriminatory protectionism are limited and could be outweighed by a broader economic downturn and increased uncertainty.

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