On Monday USA announced additional taxes on Chinese goods which seems to be stimulant enough to worsen the tiff between these two world powers.
These taxes according to experts will directly impact the American consumers with increased prices and expenditure. Trump deems this revision in the tariff amount as favorable for American companies and workers in the long run.
Starting Monday, the United States is to begin charging a 10 percent tax on thousands of Chinese imports – tires, windshield wipers, baseball gloves, bicycles, snakeskin pants, backpacks, trombone cases, refrigerators and wooden furniture, among others. The list runs 194 pages.
Unless the administration reaches a truce with Beijing, Trump’s import tax will jump to 25 percent in 2019.
On the other hand companies have also expressed their suspicion regarding the additional imposition as it might target their operations and revenue.
” Trump’s tariffs, with their uncertain duration, make it difficult for companies to plan for the future. Ted Murphy, a trade lawyer and a partner at Baker McKenzie, said the president is signaling that many companies will need to rethink their operations.
Concurrently the new round of tariffs risks triggering a more alarming response by investors. The additional taxes suggest that the two countries are struggling to make progress in settling their differences. The issues include Chinese companies’ theft of US intellectual property and a widening trade gap as US consumers have become more dependent on comparatively cheap Chinese imports.
A prolonged trade war between the United States, the world’s largest economy, and China, the second-largest, potentially affect economies from Buenos Aires to Istanbul.
Tariffs could translate into less trade, which could hinder growth in smaller nations. The US dollar has already begun to rise in value as trade tensions have mounted. This has insulated the United States from higher prices.