China has slapped additional tariffs of 25 percent on 16 billion dollars' worth of U.S. products including fuel and steel as a retaliation tariff against the Trump administration. Beijing has adopted the principle that "I don't want to fight, I am not afraid to fight, I will fight if necessary."
U.S. tariffs on Chinese goods are hurting American businesses, a situation which is at odds with the reason given by the U.S. for engaging the trade war – "American national security."
Data from Atlanta Fed said that tariffs are forcing almost one-fifth of U.S. businesses to postpone or cancel their investment plans.
According to The Wall Street Journal, trade tensions between China and the U.S. have hit small firms and startup companies hard, shrinking profits of those firms.
Actually, 82 delegates from U.S. companies and industries rejected the extra tariffs proposed on imports from China since the increasing tariffs would result in job losses and damage the U.S. economy. Up to May this year, the U.S. Commerce Department has received 20,000 applications from companies requesting exemptions from steel tariffs.
The astonishing truth is that some top officials in the Trump administration have cozy relationships with the steel industry. According to The New York Times, two of America’s biggest steel manufacturers helped the government reject hundreds of applications. And they tried to convince other companies that the tariffs are safeguarding national security and boosting domestic steel production.
The Atlanta Fed also noted that trade frictions are now mainly affecting the manufacturing sector, but the negative impact could easily spread to other industries if president Trump continues to escalate tensions.