The world’s two biggest economies have fired the opening shots in a trade war that could have wide-ranging consequences for consumers, workers, companies, investors and political leaders.
The United States slapped a 25 percent tax on $34 billion worth of Chinese imports starting Friday, and China is retaliating with taxes on an equal amount of U.S. products, including soybeans, pork and electric cars.
President Donald Trump has imposed significant tariffs on China,. Picture; AP
The United States accuses China of using predatory tactics in a push to supplant U.S. technological dominance. The tactics include forcing American companies to hand over technology in exchange for access to the Chinese market, as well as outright cyber-theft. Trump’s tariffs are meant to pressure Beijing to reform its trade policies.
Though the first exchange of tariffs is unlikely to inflict much economic harm on either nation, the damage could soon escalate. President Donald Trump, who has boasted that winning a trade war will be easy, said Thursday that he’s prepared to impose tariffs on up to $550 billion in Chinese imports – a figure that exceeds the $506 billion in goods that China actually shipped to the United States last year.
Escalating tariffs would likely raise prices for consumers, inflate costs for companies that rely on imported parts, rattle financial markets, cause some layoffs and slow business investment as executives wait to see whether the Trump administration can reach a truce with Beijing. The damage would threaten to undo many of the economic benefits of last year’s tax cuts.
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The United States hiked tariffs on Chinese imports Friday and Beijing said it immediately retaliated in a dispute between the world’s two biggest economies that President Donald Trump