US – China Trade war takes a giant leap
On Friday, 26th of August 2019 before U.S markets opened, Finance Ministry of China announced that it will impose 5% to 10% on $75 billion U.S. goods in two batches effective on Sept. 1 and Dec. 15. Dates happen to conflict with the course of action when President Donald Trump’s latest tariffs on Chinese goods are going to take effect.
• An extra 5% tariff will be put on soybean and crude-oil imports starting next month.
• A 25% tariff will be imposed on cars, with another 10% on vehicles and a 5% on auto parts and components which will go into effect on Dec.15.
• With existing general duties on autos taken into account, total tariff charged on the U.S. made cars would be as high as 50%.
• The tariff increase covers U.S. goods such as peanut butter, raisins, skateboards, life jackets, old clothes, and treadmills.
Donald Trump retorted by raising rates on nearly all Chinese imports and also ordered American companies to leave China. In his tweet, he said “We don’t need China and, frankly, would be far better off without them. Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA.”
On Saturday, Trump tweeted that duties on goods imported from China will be increased:
• On Oct. 1, tariffs on $250 billion such products will rise from 25% to 30%.
• Tariffs planned for Sept. 1 on $300 billion worth of Chinese goods will now be 15%, instead of 10%.
This tariff war has started showing its impact on the US economy which is more prominent in the Midwest and Southern regions of the country. Asian markets were shut down for an entire weekend. Hong Kong exports fell by 5.7 percent as the U.S and China trade war has shown changes.
Global markets will slump if the rivalry between two largest economies of the world continue to escalate. However, the war still continues but countries like Hong Kong are trying to resolve this Gordian knot, between China and the USA to opt for a seamless trade which does not affect rest of the world.