The China trade war has disturbed markets as China announced a higher rate of tariffs on the U.S imports. After days of twitter optimism as well as threats, U.S. trade talks with China have come to an end with no deals. Further on, higher tariffs may go into effect as reported by John Fritze.
On Monday, China announced that they would increase tariffs on $60 billion of American goods that compound the pain in the all-out trade battle among both the countries. The U. S. farmers, chemical makers, and others clamp it for a further spike to revenue. Ed Bryztwa tells, “Effectively, that market (China) is closed to U.S. exporters.”
Moreover, higher duties have been scheduled to take effect on the 1st of June. About 5,000 products would be affected, which includes beef, vegetables, coats, fruits, refrigerators, furniture and more. Also, after the Trump Administration increased tariffs of about $200 billion on the U.S. imports from China from 10% to 25%, Chinese officials declared counter tariffs.
So far, in U. S. goods, China has slapped tariffs on about $100 billion. Hence, as per the U.S.-China Business Council, U.S. exports to China had fallen by 7% in 2018. Chinese investment went down by 60% the previous year. Since the bigger toll is on business confidence and investment. According to Zandi, “It raises the probability of a full-blown trade war, which will hammer earnings.”
Farmers and ranchers were already paying higher prices for equipment, fertilizers because of the tariffs that enhanced the price of steel and aluminum (imported into the U.S). China is the 3rd largest export market for chemical makers in the U.S. However, around $200 billion in new factories in the U.S are being planned since many chemical manufacturers consider China as a prime market.
But according to Brzytwa, if the latest tariff stays, some of them could move to other countries. Moreover, Chinese manufacturers could move their chemical purchases to other Asian Countries or domestic suppliers.