On the 3rd of April, The US President Donald Trump revealed a list of more than 1,300 Chinese exports products that he said he wants to put a 25% tariffs on. The tariffs are intended to punish Beijing for restricting US investment in China and also on allegation of stealing American companies’ intellectual property. This would affect about $50 billion worth of Chinese exports.
The day following the Trump announcement, China struck back, with its own list of US exports products that it was planning to hit with 25 percent tariffs too. The proposed package could affect more than 100 American-made products, including top US agricultural export to China. This would cover about $50 billion worth of US exports.
Straight after the China announcement, Trump directed his trade team to identify more tariffs to add $100 billion worth of goods, clearly intending to escalate even further after seeing Beijing’s readiness to match his initial tariffs.
Early May, President Donald Trump sent his top economic advisors to Beijing for talks to prevent a possible trade war with China. The senior economic advisors met with Chinese officials to discuss the two countries’ trade disagreements. The US wants China to import more American goods and want them to stop forcing American companies to hand over their prized intellectual property if they want to do business in China.
Some of the US tariffs will be applied as of 6 July, and the White House is expected to announce restrictions on investments by Chinese companies in the United States by the 30th June. Trump has said that if China increases its tariffs again in response to the latest U.S. tariffs increase, the US will “meet that action by pursuing additional tariffs on another $200 billion of goods.” He added that he has “an excellent relationship” with Chinese President Xi Jinping and they “will continue working together on many issues.”
The global stock markets have weakened both the dollar and the Chinese yuan on Tuesday following Trump’s announcement that after all legal processes are complete, these tariffs will go into effect if China refuses to change its practices, and also if it insists on going forward with the new tariffs that it has recently announced, Shanghai stocks plunged to two-year lows.
Source: South China Morning