The US $50bn tariffs

The $50bn tariffs announced last Friday is about to be exercised within days, it will mean that the earlier previous efforts made by China will become completely useless; of course, the benefits planned to give to the US will be abandoned, such as the duty cut for autos imported from the US.

The US stock market volatilely responds to this tariff action. The companies, such as Boeing, which are more likely to be suffered from the trade war between the US and China, suffer significant drops in their market values. China has been trying to be more and more self-sufficient, and more and more independent. China has developed its own planes and now moved onto the semi conduct industry. Once China becomes more and more self-sufficient, it is harder and harder for the US to use blocking technology and intellectual property from China as a threat (or bargaining). For China to fight back on the US tariffs, it is easy to fight back in the sectors where China has already been self-sufficient, and cars and planes are highly profitable and can be made by Chinese companies as well, so the US auto industry and plane industry could be potentially hit hardest.

The US is also trying similar tactics on other countries including its allies, such as Canada and the EU. It seems that the US wants these countries can be like China to negotiate with the US in order to make the US be able to gain more; however, these countries have been tough and foot rooted on not negotiating with the US under threats, since Trump is a thin skinned person, it is hard for him to withdraw his previous proposal without any achievement.

To conclude, the US has put itself in a very difficult position and the trade war between the US and China is about to start and it might be the time when the US is launching a total trade war with the rest of the world.