US-China trade war and its impact globally
THE US escalated a tariff war with China on Friday by hiking levies on $200 billion worth of Chinese goods amid last-ditch talks to rescue a trade deal, as US President Donald Trump signalled that talks could drag on beyond this week. However, Trump defended his decision to raise tariffs, saying there was no need to rush into a deal and adding that the American economy would be boosted more by the levies than by an eventual deal.
Beijing threatened retaliation, even so negotiators agreed to stay at the table in Washington for a second day, keeping alive hopes of an agreement. Trump, who has adopted protectionist policies as part of his "America First" agenda, said China "broke the deal" by reneging on earlier commitments. China said it would take countermeasures.
Chinese and the US both sides have expected to resume efforts to rescue a deal that could end a 10-month trade war between the world's two largest economies. Meanwhile, US Customs and Border Protection imposed a 25% duty on more than 5,700 categories of products leaving China after 12:01 am on Friday. Trump gave US importers less than five days notice about his decision to increase the rate on the $200 billion category of goods, which now matches the rate on a prior $50 billion category of Chinese machinery and technology goods.
Obviously, the latest steps taken by Trump administration which escalated trade war between US and China has already been termed as a major threat to the global economy by the common observers. What's significant is that, the direct impact of the trade dispute would be on the people of US and China too. In fact, the tariff increases by Trump have taken many businesses in China and America by surprise, fuelling their anxieties about investment and supply chain viability.
The US importers will have to absorb it and transfer it on to consumers. America's farmers will have to suffer also. Shipments of soybeans - one of the most valuable US agricultural export crops - to China have slumped recently. We do believe, there could also be wider implications. Not only in the US and China, it would also hurt businesses elsewhere in the world.