There has been a recent row of spoiling trade relations between the United States and China and it got even worse when U.S. President Donald Trump hit China with trade tariffs, President Donald Trump imposed $60 billion tariffs of Chinese imports. In retaliation, Chinese officials intimidated or better to say warned U.S. government not to open a trade war; it is more harmful to the U.S. consumers as it is for China.
Chinese after the U.S. development has officially announced on Tuesday that China will counter the same proportion of imposed tariffs by the U.S. government on U.S. imports into China. Cui Tiankai said, “what is expected to be announced this week is the amount of tariffs from $50 to $60 million on Chinese imports in the U.S following an investigation under section 301 of the 1974 US Trade Act.” If they do it we will definitely take countermeasures of the same proportion, same intensity, and the same scale, Cui said in an interview with China Global Television Network (CGTN).
In response, China announced tariffs on US food and other imports worth $3 billion which will take effect on Monday. However, Chinese Foreign Ministry Spokesperson Geng Shuang said, “We do not favor sparking the trade war, but we aren’t either afraid of the trade war”.
The investigation under section 301 initiated by President Donald Trump focusing on accusations of theft of intellectual property and forced technology transfer by China, the charges Beijing denies, Cui said China is not bolstering its protection of intellectual property rights.
Today US stocks started tumbling after Chinese retaliation, the country raised import duties on US pork, apples, and other products, it cannot yet be classed as a trade war but the results are coming out. The Dow Jones industrial average fell as much as 750 points.
Several market giants such as Boeing, Netflix, and Amazon are suffering, Kate Warne, an investment professional for Edward Jones, says the step by China is small but significant. “The fact that a country has actually raised tariffs in retaliation is an important step in the wrong direction,” she said. “The tariffs imposed by China today lead to greater worries that we will see escalating tariffs and the possibility of a much bigger impact than investors were anticipating last week. And that could be true for Mexico as well as for China.”—She added.
The Standard & Poor’s 500 index skidded 80 points, or 3 percent, to 2,560 as of 2:30 p.m. Eastern time. The benchmark index is on track for its lowest close since late October. The Dow lost 694 points, or 2.9 percent, to 23,408. The Nasdaq composite slumped 238 points, or 3.4 percent, to 6,824. The Russell 2000 index of smaller-company stocks fell 43 points, or 2.8 percent, to 1,486. A bigger dispute looms over Trump’s approval of possible higher duties on Chinese goods.
The stock market conditions would remain uncertain until the fear among investors looms around. The United States is provoking and China is not afraid of it, what could be the possible outcome of all this so-called “Trade War” is still dubious for many economists and financial strategists.