Trump tariffs trigger trade war
This Monday, President Trump stated that he will impose a 10% tariff on $200 billion worth of Chinese goods.
On Friday, the president announced that he planned to impose a 25% tariff on $50 billion worth of Chinese goods. The same day, the Chinese government reported that it would retaliate against these tariffs by imposing its own tariff on $50 billion worth of U.S. goods. Said goods would include agricultural goods, cars, seafood, and more.
Trump defended the escalation by asserting that China has continued to put the US in an unfavorable trade position. He stated,
China apparently has no intention of changing its unfair practices related to the acquisition of American intellectual property and technology. Rather than altering those practices, it is now threatening United States companies, workers, and farmers who have done nothing wrong…Further action must be taken to encourage China to change its unfair practices, open its market to United States goods, and accept a more balanced trade relationship with the United States.
Critics of the trade war have argued that the tariffs will start a trade war with China, consequently creating a domino effect of global trade disruptions. And sure enough, Trump’s tit-for-tat tariff strategy seems to be doing just that. As long as either country fails to holster their weapons and come to a reasonable trade agreement, the tariffs will continue to pile, which will create a chain reaction in the global economy.
If the president wants to make a more favorable trade agreement with China, he may need to focus more on diplomacy and less on exponential tariffs. Otherwise, the trade war that many analysts forecasted will come to fruition.
Featured image via Wikipedia
