Trade has been one of the most primary reasons behind economic association. Cross-border trade not only makes the markets cost-efficient but rather also brings up a higher degree of specialization to the respective nations. Bilateral trades have proven to be quintessential to both sides of the deal. However, on a parallel front, every economy has a self-interest toward the domestic produce, and they also try to defend their local manufacturers from cross-border competition. The United States has an “America-first” policy. Whenever the United States imposes tariffs and duties, similar responses have been observed by China. These moves are an area of great concern for global trade. The impact is often visible on the rest of the world. A trade-off exists between domestic economic growth and favored imports. This study is an attempt to discuss the trade relations between the United States and China and how this has led to a trade war. The trade tensions between the United States and China may continue for a few more years. There is a battle for economic supremacy and global leadership. This study explains why the United States is increasing tariffs on Chinese goods and how China is retaliating. This US–China trade war has affected not only the two economies but also the world economy. This study elucidates the repercussions of trade war on the international supply chain and the countries of the European Union. This study has also endeavored to discuss the impact of this trade war on the Indian economy. It is a golden opportunity for India to increase exports to China, the United States, and Europe.
