5 ways Trump's tariffs on China will affect you

Marcus Newton
September 20, 2018

China has taken out Dollars 500 billion and more a year from the U.S. to rebuild itself, President Donald Trump has said as he defended his controversial trade policies, including the latest move to slap duties on USD 200 billion worth of Chinese imports.

Trump said that he was always willing to make a better deal with China on trade, but warned them from trying to hurt farmers, ranchers, and industrial workers.

China has openly stated that they are actively trying to impact and change our election by attacking our farmers, ranchers and industrial workers due to their loyalty to me.

China's main stock index has dropped more than 20 percent since January, with losses climbing after Trump fired off the first set of tariffs.

China wasting no time Tuesday - firing back in an escalating trade war with the United States.

"Trade wars are not good and they are not easy to win, and this escalation is of course very unfortunate", European Trade Commissioner Cecilia Malmstrom told reporters, echoing one of Trump's catch phrases that trade wars were easy to win.

India to wait and watch While India has also been subject to U.S. tariffs of 25% on steel and 10% on aluminium exports, it has reportedly made a decision to postpone levying its own set of retaliatory tariffs on certain USA goods it had planned earlier this year.

After the USA said earlier this week that it would impose 10% levy on $200 billion (₹14.5 trillion) on Chinese imports, China has hit back. The US$200 billion list unveiled Monday will start with a tax of 10 per cent and rise to 25 per cent in the new year, a move that should mute the effect of this round of tariffs on holiday shoppers.

The US has engaged in a protectionist agenda since Mr Trump took office in 2016, challenging the global system of free trade which has prevailed for decades.

That said, Trump being Trump, he may just as well respond to electoral humiliation by doubling down on his trade war. On Tuesday, China said it would impose tariffs of its own on an additional US$60 billion in United States goods.

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"But at this time, everything the United States does does not give the impression of sincerity or goodwill", he said. Specifically, they may be slow-walking Trump until the midterms.

A senior Chinese securities market official said US trade actions will fail as China has ample fiscal and monetary policy tools to cope with the impact. U.S. Treasury Secretary Steven Mnuchin last week invited top Chinese officials to discussions.

Trump imposed 25 percent duties on $50 billion of Chinese products in July. "They hope to change USA presidents", Xia argued.

The result could be higher prices for American consumers, because most companies are expected to pass on the cost to their customers.

The latest U.S. duties spared smart watches from Apple and Fitbit and other consumer products such as baby vehicle seats.

But a pain-free trade war with China is almost impossible.

According to Xia Yeliang, a libertarian scholar and former professor of economics at Peking University, Chinese leaders will be looking to save face as they were caught off-guard by Trump's announcement.

China's steps of opening up will quicken. -China trade, and investors withdrew, the US economy would be 1.6 percent - or $320 billion - smaller than under normal trading circumstances while China would lose 3.5 percent of its gross domestic product, according to a presentation Freund gave Monday at the Peterson Institute.

"They are going to try to show they will stand up to the United States and not just be pushed around, but I don't think they want to be seen as escalating things", Stratford said Tuesday during a panel discussion at a conference of business and political leaders in the Chinese city of Tianjin.

Other reports by MaliBehiribAe

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