US-China trade war got escalated further, reaching newer heights as US President Donald Trump announced 5% additional tariff to be imposed on Chinese imports. It implies that the Chinese imports worth $250 billion which were being taxed at 25%, would now increase to 30%. And the additional 10% tariff (announced earlier this month) on $300billion Chinese imports would now be taxed at 15%.
The move came in retaliation to China’s Finance Ministry’s statement of levying additional tariffs between 5% to 10% on over 5078 US goods imported by China. It is believed to impact $75 billion worth US goods including agricultural goods, aircraft, and crude oil.
China said that the tariff would be imposed in two bits – 1 September and 15 December. Beijing also declared the resumption of 25% duty imposed on US imports of automobiles and automobile.
Trump called China’s move, a “politically motivated” one and accused the country of “taking advantage” of the US.
He wrote in one of his tweets, “Sadly, past administrations have allowed China to get so far ahead of fair and balanced trade that it has become a great burden to the American taxpayer. As president, I can no longer allow this to happen!”
He also ‘ordered’ American companies to “to immediately start looking for an alternative to China”, which is the National Retail Federation called an’ unrealistic demand’
The US Chamber of Commerce also asked both the countries to “get back to the table” to discuss the key contentious issues, including intellectual property and market access.
It issued a statement, which read, “Today’s Chinese retaliation is unfortunate, but not unexpected. The fact of the matter is that nobody wins a trade war, and the continued tit-for-tat escalation between the U.S. and China is putting significant strain on the U.S. economy, rising costs, undermining investment, and roiling markets.”
The two-way tariff hike led to the toppling of the already crumbling global market. On Friday, the Dow Jones Industrial Average dropped over 620 points, or 2.4%, and London’s FTSE 100 points, while the German DAX went into negative territory.
With the ongoing trade war, global business has gone from bad to worse, and it is just the beginning as some believe that mutually destructive war of tariff might move beyond trade and equity, into other sectors, gradually taking the form of a full-blown Cold War.