A couple of days ago, history was made when the leaders of two powerful countries have official met for the very first time. Donald Trump met North Korean leader Kim Jong Un in Singapore for the summit. This is one of the biggest steps Trump has made in his time as president but he took another big step last week.
Ever since United States President Donald Trump took over, there have been a lot of plans when it comes to imposing tariffs, and it finally happened after more than a year of warnings and speculations. This is because last Friday, the president has officially announced that he has imposed $50 billion tariffs on Chinese goods.
This is his way of saying that the over the years of commercial links between two of the most powerful countries, he is officially putting “America First”, and will work on that strategy for his country to become better. This is considered to be one of the biggest and boldest steps Trump has ever taken as the president of the United States. With this decision, he said that it will now be possible for the $118 billion merchandise trade deficit to shrink. This, of course, made other officials and corporate leaders a bit uneasy, especially the Republicans in the Congress, because China didn’t show any signs of capitulating.
Trump officially imposed $50 billion in tariffs on Chinese goods
When Trump that he is officially putting $50 billion on Chinese goods last Friday, it took China more than an hour to fire back at the US. The Ministry of Commerce in Beijing made a statement regarding the trade barriers and said that they will be targeting the cars, energy, as well as the agricultural goods because of the newly imposed tariffs.
This will definitely have a major impact in corporations because ever since the 1990s, when China enters the world trading system, they have immediately provided multinational corporations with goods from their Chinese factories for over the past 10 years, the two-way trade between China and the United States have grown into almost $700 billion every single year. According to Eswar Prasad, who used to be the head of the International Monetary Fund, this move Trump just made will definitely make a huge and necessary change against the rise of global integration.
US and China relation may be in trouble because of tariff
Since China seems to have no plans on capitulating when it comes to US demands, it may be very difficult to see that there will be a negotiated settlement between the two powerful countries. By the end of the month, the Trump administration will be releasing to the public the all-new restrictions when it comes to Chinese investments within the technology industry in the states. With this move, China, on the other hand, is now currently working on reducing their dependence on some companies in the United States by developing and researching on how they could do it without having to risk so much.
How Would This Affect You?
According to some US officials, the decision of the president to impose this much tariff on China is a gamble. He is assuming that China will surrender since he is confident about how China actually needs $20 trillion from the US market, more than the American business needing China, so that would mean China would eventually lose the trade war. One of the things that lawmakers point out is how China steals intellectual properties from US goods wherein they benefit more.
Charles Schumer, who is the current Senate Minority Leader, added that this may be something the president is looking into and it is a good thing, however, it is a major risk he has taken especially with the agricultural production is in line with the trade wars.
With the announcement of putting $50 billion on over a thousand Chinese products beginning next month. This is will be a huge effect on the people since tariffs are tax, since the foreign completion has been reduced, the local producers could raise their prices. However, the Trump administration said that they will make sure American business and consumers wouldn’t get affected by the tariff too much since it will only target mainly Chinese industrial types of machinery as well as some extra goods from smartphones, toys, and clothes that the US usually truckload from China.