Newspaper headlines lie the earth as Donald Trump threatens to massively increase tariffs on goods imported from China, lending to the most serious of international trade disputes in a long time between U.S. And China. READ MORE: The Criminal Legal.
Key developments break down as —
Tariff Increase:
White House tariffs on Chinese goods to be raised to 104%, effective today The
It is a big bump from the tariffs already in place and signals the US administration further hardened their position without much margin for manoeuvre.
Explanation and Context
In parallel, China remains under scrutiny for its trade imbalance troubles IP theft and other problematic trade issues.
The administration citing tariffs for American companies as it has narrowed focus on defense and plaoting industries for U.S.
The tariff increase has also been said to be a retaliation of tariffs placed on American products from China.
Market Reactions:
The news sent global stock markets sharply lower largely on the back of significant setbacks for major indices.
Sporadic risk of what the impact will be to global trade and growth has caused investors to panic.
The American consumer also gets the short end of the stick as increased product prices loom.
China’s Reaction:
China’s reaction is strong and dismiss the US actions to nip in the bud its counter measures.
Increasing conflict over trade, and the risk of a long and damaging conflict between the world´s largest economies.
Economic Implications:
Higher tariffs are going to make a considerable dent in the US-China trade flows,
Higher import prices for American consumers, and supply chain disruptions for businesses depending on Chinese manufacturing.
Some fear a retaliation from China as well, which would further exacerbate the developments.
It comes at a critical moment in US-China trade that could ring alarm bells around global economy.
