The trade war between China and US is an ongoing economic conflict. In 2018, US President Donald Trump started setting tariffs and some trade barriers on China with a goal to force it to make some changes to what US says unfair trade practices. Among such trade practices as well as their effects include the growing trade deficit, forced transfer of the American technology to China, and theft of intellectual property.
Since 1980s, Trump advocated tariffs to reduce US trade deficit as well as promote domestic manufacturing, which states that the country was being torn down by the trading partners. It results to imposing tariffs that became a huge plank of his campaign as a president. Even if other politicians and economists argue that the persistent trade deficit of US is problematic, a lot of economists argue that it isn’t a problem and some advocate tariffs as solution that cites historical evidence, which escalate tariff conflicts that result in no winners.
In the US, the trade war brought struggles for manufacturers and farmers and high prices for the consumers. In some countries, it has caused economic damage even if other countries have benefited from increased manufacturing just to fill every gap. It also led to the instability of the stock market. The governments of some countries like US and China have taken some steps in addressing the damage. The trade war was criticized globally. In the US, agricultural organizations and businesses have been critical. But, most farmers continue supporting Trump. In terms of the US politicians, the response is mixed.
What’s the Latest about the Trade Tensions in China?
In China, there’s a perception that US tries to control its rise. Still, the negotiations are ongoing. However, it is getting tougher as time passed. The 2 sides remain far apart on the issues like how to roll back the tariffs and enforce deals. The uncertainties are hurting businesses and weighing on the economy worldwide.
The tariffs policy of US President Trump aims to encourage the consumers to purchase American products through making the imported goods costlier. The US imposed the tariffs on more than $360 billion of Chinese goods. China has retaliated with the tariffs on more than $110 billion of the US products.
Washington delivered 3 rounds of tariffs in previous year and the fourth one was in September. The latest targeted Chinese imports from musical instruments to meat with a 15 percent duty. Beijing hits back with the tariffs that range from 5 percent to 25 percent on the US goods. In the latest tariff, it includes a 5 percent levy on the US crude oil, which is the first time fuel was targeted in the trade war.
Both sides have threatened that they will take more action with the new hikes and tariffs to the existing duties. The US plans to raise the existing 25 percent tariff on other Chinese products to 30 percent. Washington plans to deliver a wave of the new tariffs on the Chinese goods, which range from telephones to footwear.
If it happens, all of the Chinese goods that will be imported to the US are effectively subject to tariffs. Also, China plans to hit another 3000 American products with the tariffs before the year ends.