Donald Trump and Xi Jinping
America and China have once again come face to face on the tariff front. US President Donald Trump has announced to impose a new tariff of 12.5% on some products coming from China. The surprising thing is that even though this decision of America has dealt a severe blow to China, it can avoid taking retaliatory action against America this time. Many experts believe that China will definitely be angry with this decision, but this time it can avoid taking major retaliatory action against America.
The Trump administration had announced these new tariffs on Thursday. It has been announced to impose 10 percent tariff on 17 countries including India. Earlier last month also, America had proposed new tariffs for its 60 trading partner countries. America says that many countries have not taken adequate steps on issues like forced labour, hence this decision has been taken.
How much was the tariff on China?
After the implementation of the new tariffs, the total effective US import duty on China will increase to 22.2%. This is 1.4 percent more than before. Economic experts say that this will put a little more economic pressure on China compared to other countries. These new tariffs will replace the 10% global tariff, which expired on July 24. However, China has once again made it clear that it opposes any kind of unilateral tariff.
Why won’t China respond?
If media reports are to be believed, according to China’s Foreign Ministry, China can avoid retaliatory action for the time being. Tianchen Xu, senior China analyst at the Economist Intelligence Unit (EIU), says that China will definitely oppose this decision, but this time the possibility of imposing retaliatory tariffs on a large scale is very less. He believes that the avenues of dialogue between the two countries have not yet been completely closed. Meanwhile, there is also news that China is trying to know from America what America wants in the upcoming talks related to Artificial Intelligence (AI)? In fact, the Trump administration is also increasing pressure on China’s rapidly growing AI sector.
If tension increases then the world will be affected
According to media reports, China’s Deputy Foreign Minister Ma Zhaoshu has reached Washington this week. Their objective is to meet American officials to understand what will be the scope of AI talks and what is America’s future strategy. Experts believe that if the tension between America and China regarding trade and technology continues to increase, then it can affect not only the two countries but also the entire world economy, global supply chain and technology industry.
Also read- America imposed 10% tariff on 17 countries including India, even Pakistan was not spared.
