On Sunday, the President of United States Donald Trump threatened China with a hike in tariff on $200 bn of Chinese goods because of talks moving ‘too slowly’. In his tweet, he said that certain Chinese products will be levied a tax of 25% from the current 10% and shortly $325 bn worth of goods that were untaxed will see a 25% tariff. This tweet comes in wake of the Chinese officials arriving on Wednesday to Washington for further talks to negotiate a trade deal and end the war between the two large economies.
Both countries had till now maintained that the trade negotiations were going well and we’re hopeful of a deal soon. Before calling a true in December, both countries have imposed taxes on $360 billion, and Trump’s tweet comes as a jolt to the progress and also puts great pressure on Vice President Liu, who is traveling to the US for negotiations this week. Trump in his tweet said,
“The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!.”
He further added,
“For 10 months, China has been paying tariffs to the USA of 25% on 50 Billion dollars of High Tech and 10% on 200 billion dollars of other goods. These payments are partially responsible for our great economic results. 10% will go up to 25% on Friday. 325 Billion Dollars…”
The tariff hike will harm not just the Chinese, but the impact will be seen around the world with many international companies saying that the trade war has impacted their business. Moreover, the International Monetary fund also expects the trade war to further affect the already weak global economy, and if the trade war continues then, the traders and investors may see a slump in the stocks market. If Trump carries out his threat, then there will be a rise in tariffs on a wide range of products ranging from consumer goods, textiles, automobiles, chemicals and much more.
There is great concern among economists that the negotiations may not progress as they wished it as both countries are trying to get as many concessions as they can, Chief economist Tom Orlik said,
“Its possible talks are breaking down with China offering insufficient concessions and an increase in tariffs a genuine prospect. More likely, in our view is that this renewed threat is an attempt to extract a few more minor concessions in the final days of talks.”