The Trump administration has threatened to further impose a USD 200 billion on Chinese goods. This may escalate the trade war between the two nations and meaningfully affect growth.
The United States’ (U.S.) administration released a list of Chinese products including vacuum cleaners, windshield wipers, sterling silver spoons and so on. The administration plans to impose a 10 percent tariff on all these products and more. However, the U.S., removed some high profile items from this list, including mobile phones.
This news led to a drop in the Chinese stock and weakened the Chinese currency.
According to Beijing, Trump’s move is an unacceptable form of bullying. China called on other countries to protect free trade and multilateralism. China further pledged to register a complaint against the U.S., at the World Trade Organisation (W.T.O.)
A statement issued by the Commerce Ministry of China suggests China is shocked by the tariff threat. It will take retaliatory measures to protect the interest of the nation and its people.
The implementation of these tariffs will cover more than half of U.S., imports from China. The Republican Party is unhappy and considers the trade war to be an unwise move on the part of the U.S., administration. It could disrupt the negotiations between U.S., and China in curbing North Korea’s nuclear weapons program. It could also undermine growth and stir up the corporate supply chains.
Businesses and economists fear that this trade war could derail the global economic boom for years ahead.
The U.S., is considering duties on a further USD 16 billion worth of Chinese goods after a public hearing scheduled later in July. China pledges to retaliate against any further U.S., tariffs.