US-China tariff war: US President Donald Trump’s decision to suspend tariffs imposed on various countries for 90 days has caused a fall in the stock market. However, he has maintained a 145 percent tariff on Chinese goods. As a countermeasure, China has announced a 125 percent tariff on US goods. This has intensified the tariff war between the two countries.
Trump has long been saying that tariffs can reduce the US trade deficit. Trump also said that they will pave the way for tax cuts in the future.
This is the first time that Chinese President Xi Jinping has opened his mouth in the atmosphere of a trade war. He said that no one should go to a tariff war, if they go against the world, it is like isolating themselves. Terming this activity as ‘bullying’, he also said that the European Union must unite to fight against American bullying. At the rate at which America has imposed tariffs on their products, it is already impossible for the country’s companies to trade. As a result, they will ignore more tariffs. If Trump makes that decision, it will go down as a ‘farce’ in the history of the world economy. At the same time, they must maintain mutual respect to come to the negotiating table, Beijing’s message said. They claim that Washington is ready to retaliate if it attacks China’s interests.
Although the US has suspended the imposition of a 26 percent tariff on India until July, major tariffs on goods from China, Mexico and Canada are still in effect. These countries supply a large part of US imports. As a result, the public, investors and the US Federal Reserve are facing another three months of uncertainty as the trade situation remains unstable. This ongoing uncertainty is certainly damaging market confidence. Fed officials are already worried that people and businesses are reducing spending and investment.
