EU's Move to Increase Tariffs and Impact of Widened Current Account Deficit in India's GDP

Question 1
A.
In a bid to ensure subsidized good does not enter the European market, the European Union has slapped China with increased tariffs. In a move publicly seen as a warning shot to Chinas global trade ambitions, the EU has made no exception even to Chinese-owned companies operating in foreign countries. China would clap back at the EU, accusing them of violating World Trade Organization rules and failing to use negotiations to solve the problem. CITATION Ste20 \l 1033 (Stefan Grobe, 2020).
B.
To reduce the cost of production, China's overseas production is sometimes heavily subsidized. For example, the Suez Economic Zone in Egypt, where China produces and exports fiberglass, has all its products subsidized. The New Trade theory discussed in Chapter 4 points to, "Nations specializing in the manufacturing and exportation of particular products not due to underlying differences in productivity or factor endowments, but rather on their ability to capture costs and strategic advantages." China using foreign nations special economic zones as production centers offers them two main advantages. Goods are produced at subsidized costs while at the same time enjoying strategic advantages such as reduced taxation due to foreign investment deals. Due to such business advantages, China has been able to export subsidized products to the European Union, hence having what is deemed an unfair advantage over home companies. Simply put, due to the New Trade Theory approach, China has been able to conquer European markets using subtle and non-predatory means.
With Brussels imposing tariffs on Chinese–owned companies to safeguard European Union companies and business interests from being adversely affected by subsidized imported goods, we can observe the concept of protectionism. Protectionism in business refers to any attempt or move by the government or its agencies to shield the nation's economy from unfair trade. The main instruments of protectionism are tariff barriers and tariffs. Tariff application on subsidized Chinese goods, including those produced out of China by the European Union, aims to shield the economy from unfair trade by regulating what its residents can easily purchase. Additionally, the move is also made to reduce any influence and foothold that the Chinese firms may have held over European Union markets....