The Chinese has government has retaliated in the trade war with the US and on Tuesday said that it would impose tariffs on US goods worth $60 billion following the Trump administration’s announcement that he was imposing $200 billion worth of new tariffs on Chinese products.
China is aiming to go toe to toe with the US and is hitting back with new tariffs that will be levied at rates of 5% or 10%, depending on the product, from the same date, China’s state council said.
Beijing has also indicated that further tariffs could be on the way if the US retaliates or escalates this matter further. It has become a common theme with Trump on one side, usually the other party has to portray the calming influence, before they both they breach there ‘points of no return’.
Although China has responded to the Trump imposed tariffs on Chinese products, the eastern superpower hasn’t fully flexed its muscles and is being tentative and cautious as it is trying to avoid escalating this trade war further.
Current estimates suggest the Chinese tariffs will target more than 5,000 US goods, including meat, nuts, alcoholic drinks, chemicals, clothes, machinery, furniture and auto parts. It is yet unclear if Apple iPhones and iPads will also be targeted by the Chinese superpower.
The trade war deepens the conflict between the top two economies in the world. The effects of which are already hurting companies on both sides of the Pacific. The latest US move means roughly half of the products that China sells to the United States each year will be hit by American tariffs.
The tariffs, imposed by the US, start at a rate of 10%, before rising to 25% at the end of the year. They come into effect on September 24, and will apply to thousands of Chinese products, ranging from food seasonings and baseball gloves to network routers and industrial machinery parts.
Although, the full impact of these tariffs is not totally clear, what will happen, is the cost to the end user will rise sharply. The brunt of the impact of this trump led Trade war will hurt the consumer the most.
Rural America, who are mainly pro trump, are being hit particularly hard. pig farmers are bracing themselves for a $200 million dollar impact. As the cost of this trade war rises the trump administration is planning on providing a $12bn aid package to cushion the blow the farmers.
Some economists and policymakers fear that the next global crisis could hit us in a similar way through the banking collapse a decade ago—out of nowhere, that is—this time because of the escalating trade war.
Talks to resolve the matter ended without resolution this spring. However neither party has closed the door on future negotiations.
Jack Ma the executive of Alibaba told investors to hunker down for a drawn out trade war between the United States and China.
“It’s going to last long, it’s going to be a mess,” and added that the US-China trade war will last not for 20 months or 20 days, but “maybe 20 years,”.
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