China is not ready to toe the line that the American president Donald Trump has laid in the import of goods. The country is prepared to fight the protectionism that the United States has undertaken in an effort to boost the consumption of the goods produced in the domestic circuit. The tit-for-tat would only escalate the trade war between the two countries. Things might just get tough for American firms as Chinese market plays a key role, which is the second biggest economy in the globe and growing at a strong pace.
Fight till the End
The Chinese government has categorically stated that it is not backing down and would not budge to the threat of imposing tariffs on imported goods from the country. The American government’s tariffs were predicted to cover goods worth about $50 billion. Aside from that, the United States also wanted relief worth $100 billion from the Asian country on its goods. The tariff war has cast its shadow on the share markets too as the futures were tumbling in the U.S., Bloomberg reported.
Reacting to America’s tariff move, Chinese Commerce Ministry stated, “The Chinese side will follow suit to the end and at any cost, and will firmly attack, using new comprehensive countermeasures, to firmly defend the interest of the nation and its people.” For his part, Trump termed the Asian nation’s retaliation as an unfair one.
The latest developments were viewed as a big setback to those who are engaged in lowering the heat following the unexpected move from Trump on tariffs. The United States and Chinese officials failed in preventing the current situation from intensifying into a big trade conflict between the countries. Officials from the administration have already spent two days to bring down the fears of a trade war.
However, chief economic adviser, Larry Kudlow, indicated that there was still a possibility of the United States hammering an agreement with China. Though stock futures reacted unfavorably, bonds have increased. On Wednesday, China has slapped a 25 percent tariff on imported goods from America worth about $50 billion. This included aircraft, automobiles, chemicals, and soyabeans. The country reacted to Trump’s planned tariffs on aerospace, machinery, and robotics.
America Risks Isolating Itself
Reacting to the developments between China and the United States, Canadian Imperial Bank of Commerce’s strategist in Hong Kong, Patrick Bennett, said that “This is starting to feel like the beginnings of a trade war if simply each proposal is matched with a relation. The U.S. risks isolating itself from global trade in this process, and we think the U.S., USD, and U.S. asset markets have more to lose.”
However, Trump is no mood to budge and struck a defiant tone. He believes that it was time to end Chinese taking advantage of the United States. Though he expects a good long-term relationship with China, he wanted to straighten it out and has some balance. For its part, China is looking at the European to support its reasoning and rebuff the protectionism for upholding the global trade order.