China has retaliated by placing tariffs on US goods that could see an increase of up to $3 billion USD. The price increase has taken place due to the tariffs that Trump had placed on imported aluminium and steel in a strategy to put Americans first.
Representatives of the Communist Party stated that American politicians need to realise that China will not submit if the US decided to launch a trade war. While the two countries haven’t openly admitted that there is a trade war, the actions that are currently taking place are pretty good indications of the events to come.
China plans on increasing the tariff on US goods such as dried and fresh fruits, wine and nuts by 15 percent. Pork products and aluminium will also see a 25 percent increase. Last year the American pork industry claimed that they sent $1.1 billion USD in products. China is considered the number 3 market for US pork products.
The Chinese Finance Ministry said that the tariff increase on American goods is an appropriate measure that the country will adopt to protect their interests due to Trump’s tariff seriously damaging the interests of the Chinese public.
Other US trading partners such as the EU and South Korea were exempt from the tariffs as they also threatened to impose their own new tariffs on American goods. European governments’ retaliation was to raise the tariff on bourbon and peanut butter that comes from America.
Recently Australia was exempted from the tariffs not because of threats but rather due to the longstanding alliance that the two countries have. Mexico and Canada were also exempt from the tariff increase without any retaliation threats imposed.
China is currently facing complaints from their trade partners; America and the EU, over there approach to flood the global market with low-priced aluminium and steel that is obviously improperly priced. However with that in mind, the EU and Japan has criticised Trump’s new tariffs as a disruptive move in the world economy.
According to forecasters, the immediate impact of the tariff hike will be limited but if other countries start to raise their own import tariffs it could hinder the recovery of the global market.
The immediate affect can be seen on country stock prices that dropped but have since recovered. Earlier this week Tokyo was reportedly down 0.3 percent and Shanghai finished 0.2 percent down as well.