Full Blown Trade War: China Tariffs US Goods 125%

China recently imposed an astounding 125% tariffs on selected American goods, escalating trade war between the two largest economies of the world. This move comes in effect on 12th April as a retaliation against the Trump Administration. Earlier, US doubled down on China in tariffs totaling it to 125% as well.  US tariffs are particularly concentrating on the Chinese electric vehicles (EVs), solar panels and electronics.  Moreover, China has directed the high taxes to disrupt US exports, strain industries and increase costs for American businesses and its consumers.

China Willing to Fight

In a strategic move, President Trump gave a 90-day tariff pause to the rest of the world to focus his trade war solely on China. US has mostly targeted Chinese EVs, solar panel and semiconductors. In return, Chinese government’s decision to impose equally high tariffs on certain US goods, like automobiles and agricultural products, marking that China is willing to fight the trade war on the terms of equality. China maintains that US trade restrictions are unfair to the idea of free trade and therefore has retaliated aggressively. This trade war risks the whole economy of the Globe, as the tit for tat between both huge manufacturing hubs is leading the global economy to recession.

Major US industries Targeted by Chinese Tariffs

The new Chinese taxes will hit several American industries very hard, some of them are as follows:

• Automobile Sector: Inflated prices of American cars will lead to a high drop in their demand in the Chinese auto market, which is one of the biggest in the world.
• Agriculture: American farmers will also face the major burnt of the Chinese tariffs as their produce like pork and soybeans will cost more in the Chinese market.
• Manufacturing & Tech: Most of young Chinese adore newer technologies and the recent hike in tariffs will make American products unpopular. This will lead to drop in the demand for American products.

Economic Repercussions for America

Overall, the Chinese tariffs will have the following major effects for the US:

• Drop in Exports: It is evident that American business will earn less revenue in China as they will see lower sales.
• Unemployment: Certain American industries reliant on the sales in Chinese market will have to do mass layoffs to minimize their losses.  
• Rise in Inflation: American businesses will have to find new supply chains and this will lead to the rise in the prices of their products.

Future of US-China Trade Relations

The recent tit for tat in tariffs shows a deep divide in China and America trade relationship. For now, American leadership might see an opportunity for some additional restrictions, which will further disrupt the world economy. Globally, businesses are urging both countries to engage in negotiations to lessen the damage without which global economy in general and both nations in particular are looking into a bleak future.

Conclusion

Chinese tariffs on US goods in response to the same done to them is another economic challenge for America as it threatens key economic sectors and jobs. The retaliation from the US government is expected but US will have to take a measured approach to safeguard its economy, while trying to find a balanced trade with China.