While President Trump downplays the impact of recent trade tariffs initiated against China and the reciprocal Chinese tariffs against US products, many people fear that a trade war between US and China is imminent. Experts believe that both countries have so much to loose by engaging in a full scale trade war. The US Government of Donald Trump and the Chinese Government of Xi Jinping are closer to a full scale trade war nonetheless.
Trump administration plans to “impose tariffs of 25 percent on steel and 10 percent on aluminum, against China, effectively placing a tax on every foreign shipment of those metals into the United States”. Also the Trump Administration has provided a list of goods from China which would carry a 25% tariff rate unless China makes major trade and investment concessions to the US soon. US authorities were a little surprised when China immediately unleashed their own plans to impose $50 billion worth of tariff on a list of US products including agricultural products, beef, cars, planes, soybeans and whiskey.
Donald Trump made this issue one of his campaign promises when he accused China of unfair trade practices against the United States. Chinese companies are also accused by Trump of stealing US intellectual property. Trump vowed to stop these unfair trade practices by China once he became the President.
Who would win this trade war between the US and China remains the big question. Many business analysts believe that it would hurt both countries but China has more to loose. The US stock markets were rattled earlier today when the market index lost over 500 points at the open although it recovered and closed up more than 230 points by the end of the trading day, and NASDAQ gained over 100 points. The US dollar fell while the Japanese Yen gained because the Yen and Japan stands to benefit from a trade war between the US and China.The markets recovered following the comments of Larry Kudlow, the new Trump Economic Adviser. Kudlow also said the US will take its case against China to the WTO. He said China is not playing by the rules and has similar trade issues with other world trading partners as well.
ABW would bring you the latest on this matter as soon as new information becomes available
Report written by Okechukwu Oranika