The imposition of 100% tariffs on all imports from China and India would create an unprecedented shock to global trade, according to Dr Jonathan Owens, Senior Lecturer in Operations and Supply Chain Management at the University of Salford.
Talking to Business Matters Dr Owens warns that such a move would severely disrupt supply chains, drive up costs, and have far-reaching geopolitical consequences.
Both countries are integral to the global economy. China, the world’s largest exporter, dominates in electronics, machinery, textiles, automotive parts and consumer goods. Its manufacturing base is deeply embedded in the supply chains of multinational corporations. India plays a crucial role in IT services, pharmaceuticals, textiles and chemicals. Few global alternatives can match the scale and depth of their expertise.
Initially, some businesses might absorb the higher costs by compressing margins or delaying price changes. But Dr Owens notes this is only a short-term response. Over time, increased costs from tariffs and supply chain disruption would inevitably be passed on to consumers.
Industries with fast product cycles – such as electronics, clothing and consumer goods – could see price rises within months. For sectors dependent on seasonal stock, the impact might be felt in the next product cycle. Meanwhile, industries with longer, more complex supply chains – particularly automotive and digital hardware – could experience compounded cost increases where multiple tariffs are applied at different stages.
Supply chain shifts are slow to stabilise
Some firms would attempt to mitigate the impact by sourcing from new suppliers, redirecting supply chains, or shifting production to other regions. However, such changes are medium- to long-term strategies. Transitioning production is complex and costly, with limited viable alternatives to China’s manufacturing scale or India’s IT and pharmaceutical capacity.
The timeframe for global supply chains to adjust would therefore span months to years, during which consumers and businesses alike would face sustained disruption.
Tariffs on China and India would also trigger knock-on effects across other markets. As businesses reprice goods and redirect sourcing, ripple effects could spread to industries not directly reliant on Chinese or Indian supply chains. Customers may seek cheaper alternatives, while competing exporters could increase their own prices in response to shifting global demand.
Dr Owens suggests the situation could “irritate customers” as once-affordable products quickly rise in price, undermining consumer confidence and household budgets.
With tariff retaliation a likely outcome, the risk of a broader trade war would be high. Reciprocal measures from Beijing and New Delhi could further restrict flows of goods, services and raw materials, with particularly damaging consequences for sectors such as agriculture, automotive, technology and pharmaceuticals.
Ultimately, while the immediate impact would be higher prices for consumers, the longer-term implications would be the destabilisation of global supply chains and heightened geopolitical tensions. Businesses and governments would need to adapt strategies quickly to avoid systemic risks in a deeply interconnected global economy.
Read more:
Global supply chains face severe disruption if China and India hit with 100% tariffs