International trade, in recent years, has become critical with a larger share of country GDPs weighted towards exports and imports. There have, however, also been growing concerns about the potential negative effects of the ongoing trade wars between the U.S. and China, which undoubtedly bear far-reaching repercussions on other economies. This could erode global GDP in 2022 by 1.96 per cent, and lead to a 17 per cent decline in global trade. Although the outlook of global economies looks grim, Asian economies are trying to cash in on opportunities emerging from the trade war, particularly India and ASEAN countries, which are trying to increase their trade footprint in the global supply chain.
To avoid tariff, manufacturers are looking at opportunities in ASEAN and India to relocate capacities. Relocation, however, is time-consuming due to significant fixed and sunk costs.
 Potential Economic Effects Of A Global Trade Conflict, World Trade Organization, Eddy Bekkers and Robert Teh, 1 April 2019
(A version of this article appeared in The Moneycontrol on Jan 28, 2020)