Today, the US and
China has increases their tariffs on each other. The US imposed tariffs on
$34bn of Chinese imports today; and China called this act as 'trade bullying'
and counters with own levies. Furthermore, the US has planned a further $16bn
that will be targeted in the coming weeks and if China continues to fight back,
a further $200bn will follow and this will go on and on (suggested by the US
President Trump).
The US President
Trump is really serious about his words, it means that he wants the US to an
absolute winner while making China an absolute loser after all. China, as a
sovereign country, has no reason to allow such humiliating trade tariffs to be
imposed on its exports by the US, China is fighting back and would always fight
back. This behaviour will not only be seen on China, but also be seen on other
sovereign countries, such as Canada, Germany and Mexico. The US has attacked
many countries on the issue of trade, this could imply that Trump may lead the
US to enter a wide scale trade war with many countries and no country will
surrender in this war.
Although the market
has reacted to the news of trade war, it does not mean that the market will not
react to the trade war in the near future volatilely. No one knows what will
happen surrounding the issue of trade war. Countries may try to find some ways
to get around of this issue; however, since several major economies have
already involved in this matter, the chance of finding some way to get around
is low. If the world fails to find a way to get around of this issue, then
almost everything can happen, and it is almost certain that there will be one
or more losers in the trade war but there is a possibility of no winner after
all.
No comments:
Post a Comment