The unintended consequences of Trump’s trade war with China

Adjust Comment Print

The tariffs, which took effect on Friday at midnight, prompted Chinese officials to fire back with retaliatory tariffs on US goods, which would immediately go into effect on American imports.

While the administration says the trade barriers will force China to stop stealing American intellectual property, it appears more likely that non-Chinese businesses will bear the brunt of the tariffs, according to an analysis by the Peterson Institute for International Economics.

Beijing insists it's the injured party.

China's Commerce Ministry said it would be 'forced to make a necessary counterattack.' It gave no immediate details but Beijing earlier released a target list of American goods for retaliation including soybeans, electric cars and whiskey.

China's tariff list is heavy on agricultural goods such as soybeans, sorghum and cotton, threatening US farmers in states that backed Trump in the 2016 USA election, such as Texas and Iowa.

"Such tariffs are typical trade bullying, and this action threatens global supply chains and value chains, stalls the global economic recovery, triggers global market turmoil, and will hurt more innocent multinational companies, enterprises, and consumers", the statement said.

The big question is how far the hostilities between Washington and Beijing will go.

Washington imposed 25 per cent duties on Dollars 34 billion of imports from China, the first in a series of possible increases that President Donald Trump says could affect up to USD 550 billion of Chinese goods, more than the total amount China exported to the USA past year.

She notes, "80 percent of "red" states produce goods subject to retaliatory tariffs totaling 10 percent or more of GDP, compared to 10 percent of "blue" states".

"Then you have another 16 [billion] in two weeks and then as you know we have 200 billion in abeyance and then after the 200 billion we have 300 billion in abeyance. OK?" What galls them most is the president's justification: Using a little-used weapon in USA trade law, he has declared that the imported metals are a threat to America's national security. It's also bigger than the $506 billion of goods that the United States imported from China previous year.

The managing director of the Association of German Chambers of Trade and Commerce, Martin Wansleben, also spoke out Monday in favor of strengthening economic relations between his country and China.

More news: Serena Williams wins again at Wimbledon, closes in on Grand Slam No
More news: Trump Announces New Taxes on TVs and Air Conditioners
More news: UK's May names loyalist Jeremy Hunt as foreign secretary

Despite dire warnings about the impact on the US, Trump believes the robust American economy can outlast its rivals in the current battle.

Canada hit back by imposing tariffs on more than 100 United States products, from ketchup to toilet paper, insecticide and washing machines.

The clash with China comes as the Trump administration is also fighting over trade with American allies such as Canada and the European Union.

So far, the Chinese goods the USA has chosen to levy additional tariffs on are capital and intermediate goods, rather than consumer goods.

President Trump is right about one thing.

For the time being, analysts say it's hard to see Washington or Beijing backing down in the dispute.

Gerard Bottino/CrowdSpark/NewscomBegun, the trade war has.

The retaliatory tariffs from China will fall especially hard affecting more than 25% of a county's economy-in almost 20% of the counties that voted for President Donald Trump in 2016, affecting eight million people mostly in agricultural, manufacturing and technology sectors, The Wall Street Journal reported. "It's not simply a matter of the relative size of the two economies".

A spokesperson for the Alliance of Automobile Manufacturers said in an email Friday that some United States carmakers may not feel a major impact right off the bat. There are unlikely to be any winners in a trade war.

"If those come into effect, we'll have to close down plants and jobs will be at issue", he said. That conjures the image of this being a cool, calm, collected game of chess on both sides: Washington and Beijing.