World Economy

Donald Trump Escalates Trade War With China

Donald Trump Escalates Trade War With China
Donald Trump Escalates Trade War With China

The Trump administration announced Wednesday that it would impose 25% tariffs on imports of 279 items from China amounting to $16 billion. This is the second tranche of such tariffs and comes into effect on August 23.

Washington had already imposed tariffs on $34 billion on July 6 but held off on a final $16 billion in goods as a result of concerns from US companies, PTI reported.

The total could increase soon. The US trade representative office is reviewing 10% tariffs on a further $200 billion in Chinese imports, and is even considering raising the rate to 25%. Those duties could be in place after a comment period ends on Sept. 6.

President Donald Trump has suggested he may tax effectively all imports of Chinese goods, which reached more than $500 billion last year, Bloomberg said.

A US-China trade war will reduce global output by 0.7% by 2020, with China’s economy taking a 1.3% hit and US GDP dropping 1%, Oxford Economics said in a research note Tuesday, before the new list was released.

While there’s no major risk of the world lapsing into “damaging stagflation”, the possibility remains of a “bigger blow-up” that sharply reduces trade, as in the 1930s, it said.

Still, there’s little sign the trade threat is hurting shipments just yet. Chinese data Wednesday showed imports jumped and exports remained robust in July.

Among the products removed from the earlier list on $16 billion of imports were shipping containers, including those used by freight companies.

Schneider National Carriers Inc. and other firms testified during a hearing July 24-25 in Washington that there are no US manufacturers and that the containers are almost exclusively made in China.

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