Friday, July 6 marks the beginning of a trade war in Trump era as the President of United States (U.S.,) Donald Trump imposes new tariffs on Chinese imports. This will increase the global market anxiety as the U.S., has called a trade war with one of its largest trading partners.
Trump imposed 25 percent duties on about USD 34 billion in Chinese machinery, electronics, high tech equipments and LEDs. Beijing immediately retaliated with counter tariffs. This led to the rupture of months of dialogue between two of the world’s largest economies.
The trade war has created a growing fear of shrinking markets, higher prices and slower growth of the economies. Meanwhile the U.S., is hurling accusations on China. According to U.S., officials, China is emerging in industrial dominance by theft of technological knowledge through cyber channels, forced transfer of intellectual property, and so on.
It is being said currently the economic strength of the U.S., can outwear its enemies. However, the U.S., Central Bank fears the new tariffs may have a negative effect on the American economy. There are signs of approaching inflation due to this trade conflict. The trade war will also lead to rolling back of many spending plans.
The trade war will create a major crises for Trump and the Republican Party on the home front. It will not only widen the cleavage between Trump and the Republican Party that believes in free trade, but also cost them votes during the midterm elections in November.
According to the U.S., Chamber of Commerce, due to the trade war, the country is already facing reprisal from Canada, Mexico, China and the European Union.
