Major tariff impositions that are fueling today’s US-China trade war
The global economy will be the first one to absorb the full effects of an actively escalating trade war such as the one that is currently being waged by the U.S. against China. Aside from fracturing supply chains, disagreements on trade policies at this level can also be taking away millions of jobs in many American companies that largely depend on Chinese parts, primarily because of the war’s effects on tariffs and other prices.
Currently, the US-China trade war has been characterized by both country’s back-and-forth impositions on tariffs especially focused on imports to and from the country. The aftermath of these policies have directly caused restrictions on trade, and its escalation could lead to something much worrisome.
When Trump initially forced the imposition on aluminum and steel tariffs in March, he followed it up by announcing 25% tariff (ranges from $50 billion to $60 billion) in Chinese exports that include aerospace, machinery, as well as information and communication technology.
As a response, China imposed fees that cover a wide variety of U.S. products such as sparkling wine, apples, and scrap aluminum. This triggered another counterattack from the U.S. government when they threatened to raise fees on thousands of Chinese products.
“Volatility is back again this year as latent geopolitical tensions come to a head,” writes Bryan Dooley in his article on LOM Financial. “The United States’ trade war with China and President Trump’s antagonistic approach to America’s most important trading partners has been a recent tipping point.”
Tariffs aimed at the Boeing planes did not escape the burden of this trade war, and the U.S. is not showing any sign of giving up as President Donald Trump once again promised another wave of tariffs on Chinese goods, and that is expected to cost $100 billion.
The Chinese government recently warned that in order to protect their own economy, they would do everything in their power to fight back by coming up with a new list of more comprehensive trade measures that will target the United States if the latter take more steps to escalate the situation.