Trade wars between the US and China are threatening to escalate following Monday’s threat by the US to impose additional tariffs on Chinese goods. In a statement released by the white house, the Trump administration warned Chinese officials not to pursue its intended additional tariffs, warning that such a move would be countered with additional $200 billion worth of tariffs.
In the statement, the president advised China to open its markets for American goods and cease the unfair trade policies that it has been pursuing against the US. The president added in the statement that the US was working in the best interests of seeing global trade advanced on a fair platform where the massive trade deficits evidenced are minimized as much as possible.
China’s move came after the US on Friday slapped a 25% tariff on $50 billion worth of trade goods exported to the US. China responded saying that the US had started a trade war against the country and that it would retaliate with its own set of tariffs on US exports to China.
The current escalating standoff between the two countries deemed as having the largest economies in the world has already threatened to derail the face of global trade with stock markets in Asia slumping significantly. Companies have also been adversely affected due to the high levels of uncertainty that the trade wars have possed on their business.
Chinese commerce ministry said that the US’ threats were extreme and termed them as being ‘extortionist’ in nature. China said through the ministry that it would respond with tough measures which it did not outline.
President Trump said that the new sets of tariffs are as a result of intellectual property right theft that China has been quite notorious for. According to his plan, over 800 exports from China will be tariffed by the start of July 6 while an additional 280 exports would be subjected to consideration for possible tariffs later on.
Trump also directed the trade representative to establish additional tariff measures which would be implemented if China does not move swiftly to rectify the unfair trade policies. With the trade profile between the two countries being significantly skewed in favor of China, the country would have to find additional measures to counter the US’ move.
Last year, China exported $505 billion worth of goods to the US while the US exported $130 worth of goods to China. The huge trade deficit created in this trading profile may force China to think of new retaliatory measures.