China will impose an additional 25 percent tariff on a total of 656 U.S. imports worth about 50 billion U.S. dollars in response to U.S. President Donald Trump’s decision Friday to levy duties on Chinese goods.
The rising trade tension between the world’s two largest economies has caught the attention of global media, as analysts and businesses are worried that tariffs could morph into a potential threat to U.S. investment, jobs and economy beyond consumer price inflation.
Tariffs sharply break a generation of economic ties
The Washington Post published a piece entitled “With tariffs, Trump starts unraveling a quarter-century of U.S.-China economic ties.”
It pointed out that Trump’s tariff decision marked his “boldest step” so far to implement his “America First” strategy, but his aggressive approach is rattling American corporate leaders and his Republican allies in Congress, as China shows no signs of capitulating.
About an hour after Trump’s announcement of tariffs, China unveiled counter tariffs targeting agricultural goods, cars and energy, which are expected to hit Trump’s supporters in farm states and the industrial Midwest.
‘About $75 billion of U.S. exports’ to be hit in first week of July
The Hill cited several business groups who expressed their continued concerns for Trump’s decision.
Hun Quach, vice president of international trade for the Retail Industry Leaders Association, said with Canada, Mexico, the EU and China all promising counter tariffs at the same time, America’s retailers, farmers, autoworkers and American employees throughout the global value chain are at risk.
In the first week of July, about 75 billion U.S. dollars of U.S. exports will be hit with retaliatory tariffs, said John Murphy, the U.S. Chamber of Commerce vice president of international affairs.
The 75 billion U.S. dollars include 34 billion U.S. dollars from China and 40 billion U.S. dollars from Canada, the EU, and others in retaliation for U.S. tariffs of 25 percent on steel and 10 percent on aluminum imports.
Farmers who are going to be hit by the tariffs pledged they will not remain silent.
“For American farmers this isn’t theoretical anymore, it’s downright scary. It’s no longer a negotiating tactic, it’s a tax on their livelihoods," said Farmers for Free Trade Executive Director Brian Kuehl.
‘Investment and jobs in jeopardy’
USA Today recognized the big risk that Trump’s tariffs strike will cause counter tariffs from Canada, the EU, China and others in an article titled “Where are consumers in the U.S.-China trade dispute? Right in the crosshairs.”
If the disagreement between the U.S. and other big economies spins out of control, investor confidence in the economy and market would be seriously undermined, and it is the indirect effect on confidence that matters.
The article cited Michael Gapen, chief U.S. economist at the New York offices of Barclays, a British bank, as saying it is far worse for the U.S. financially if the trade fight causes the economy to slow, businesses to stop hiring or start firing, and markets to suffer a sizable tumble that sets their retirement accounts back in a meaningful way.