The United States and China have been getting into trade war due to the tariffs imposed on Chinese and American products. The raised tariffs have affected countries and their products to a great extent. It has been noticed that the countries are dependent on one another in terms of finances, politics and businesses. It is not possible to carry out the development processes without each other. The trade war has not ended yet because US is not likely to give them any relief in coming future too.
Beginning of Trade war
Trump, the US President, complained of China’s trading practices back in 2016 before he took the office. Due to this, the country decided to investigate the trading policies of China. The United States imposed the billion dollars tariffs worth the Chinese products. In December, both countries agreed to put a pause on new tariffs and ready to discuss the matter. China was relieved a bit due to the prospect of the deal. However, US has doubled its tariffs on $200 billion worth of Chinese products. In return, Beijing also hiked the tariffs of 60 billion worth of US products.
The tariffs in place
In year 2018, US imposed tariffs of $250 billion worth of Chinese products in three rounds. It has been noted that 25% of duties are covered of consumer and industrial products ranging from handbags to railway. This led to a trade war in which Beijing imposed tariffs of $110 billion worth of American products. It was also alleged that the United States has begun the largest trade war in the history of economy. The products which china targeted include coal, medical equipments and chemicals. The countries agreed to talk in December.
However, on Friday, US further raised the tariffs of $200 billion worth of Chinese products. The China retailed but the countries kept talking about the issue.
Reason for trade war
The main reason for trade war to encourage people buy American products because the tariffs imposed on Chinese products are expected to make US products cheaper.
Due to the trade war, the international and US firms have badly been affected. The fear about further escalation of trade war has hit the stock market and the investors at the same time. if this continues, the global economy will weaken.
It has been reported that the American families are paying the prices of these tariffs which led to this longest trade war. The consumer products are more expensive and the stores like Walmart have confirmed that the prices have been hiked due to the taxes imposed by China as an answer of the trade war actions. Earlier, Trump began raising the tariffs and promised that only China would bear the burden of tariffs and US would not be affected. However, after all the actions and retaliation, the American families are also being affected.
Likewise, the trade war has affected the China’s economy and also the American companies that sell their products within China including Caterpillar and General Motors.