China is the biggest trade partner of the U.S., and after President Donald Trump imposed tariffs on imports from China, he started a trade war between two of the most important economies of the world. Washington set a 25% tariff on $34 billion worth of goods coming from the Far East country, and it started on Friday, at 12:01 a.m. ET. As a result, foreign ministry representatives from Beijing stated that additional duties would be imposed on the U.S. made goods.
As soon as POTUS announced that there could be additional tariffs on Chinese products, Beijing responded saying that they will counterattack and among the first to be hit are the car manufacturers and soybeans. There is a long list of products that Trump presented, and this is done as he isn’t pleased with the trade deficit that the U.S. has with China.
One more thing that the United States officials mentioned about China and the way some of its companies are doing their business is the predatory tactics that are quite unfair as it requires from the U.S. companies to share tech so that they could access the market of China. These allegations were rejected by Beijing.
For many economists and analysts, this trade war is a big mistake as it will mostly hit consumers. Here is what Josh Kallmer, executive vice president for policy at the Information Technology Industry Council, a trade association for the communications technology industry said: “The decision to impose tariffs on Chinese goods will harm American consumers and businesses without addressing discriminatory and systemic Chinese trade practices and policies.” He continued by adding “It is troubling that the (Trump administration) continues to assume that the imposition of tariffs will convince China to resolve complex trade issues, and irresponsible to downplay the impact on American workers and businesses.”
The trade deficit of the U.S. towards China hit the record in 2017 at $375 billion, and they are in front of Canada and Mexico when it comes to trade with Washington. On the other hand, the European Union is the biggest political bloc in terms of trade with about $1.1 trillion in goods and services exchanged in 2016.
It is clear that we are at the brink of the largest trade war in history as Trump is ready to clash with China and he already damaged his relationship with longtime allies Canada, Mexico, Europe, etc. William Zarit, chairman of the American Chamber of Commerce in China said: “There are no winners in a trade war.” He also added that both sides need to sit down and find a solution.