US-China trade war ensues as Beijing responds with tariffs
Trade tensions between US and China have escalated. Now, Beijing has responded in kind to US plans of hitting hundreds of Chinese imports with new taxes. China plans to slap 25% additional tariffs on about 106 US goods, which include core American exports like soybeans, planes, cars, whiskey and chemicals. Here are the details.
How has the tariff war proceeded until now?
The trade war began last month when US President Donald Trump announced steep tariffs on imported steel and aluminum imports. This was because the struggling domestic market was facing a "national security" threat. Subsequently, US imposed tariffs exclusively on Chinese imports worth up to $60bn. China followed it up with up to 25% tariffs on 128 US goods affecting imports worth $3 billion.
Earlier today, US proposed $50 billion tariffs on 1,300 Chinese-products
US announced a proposed list of products imported from China that could be subjected to additional tariffs of 25%. The list covers about 1,300 items ranging from chemicals to machine parts. Trump's newest policy aims to force China to address the issue of US intellectual property theft and forced technology transfer from US companies to Chinese competitors.
What does this imply?
Hours after the US move, Beijing released a list, sooner than expected. This aroused market fears that the two giants are probably headed towards a showdown that could affect the global economy. Though Chinese tariff's effective date depends on when US action takes effect, it triggered heavy selling in global stock markets/commodities. China insists that US has snubbed efforts to talk it out.
