US-China trade war favours none
Two major world powers China and the United States are at loggerhead over mutual trade as the new US leadership under Donald Trump imposed a heavy tax on Chinese goods in the country. China also played tit-for-tat and announced imposition of huge taxes on goods procured from the US.
For now the trade war between the two major economies of the world has not been resolved even though some measures have been announced, albeit unofficially to set things right.
For China, at stake is its exports to the US worth USD 439.9 billion last year while US exports to China totalled to USD 143 billion. This figure reflects trade carried out by the two giants in just twelve months.
China is making assessments as the United States has recently reached out to convey messages to China through relevant parties many times, expressing hope to engage in talks with Beijing over tariff issues.
Notably, the tariff and trade wars were unilaterally initiated by the United States and China followed suit. Though nothing concrete can be said at this juncture but if any negotiations are to be held, both the parties need to demonstrate sincerity and make preparations and take concrete actions on issues such as correcting erroneous practices and lifting the unilateral tariffs.
China at present is the only country the US tariffs have come into effect while the US President Donald Trump paused reciprocal levies against a host of other counters, including India and the EU, isolating Beijing, which for its part went ahead with tit for tat tariff war with Washington.
Donald Trump slapped 145 per cent tariffs on Chinese exports. Later, the White House said tariffs on Chinese goods amounted to 245 per cent. Beijing too retaliated by imposing 125 per cent levies on US exports.
China has been denying any talks with the US on tariffs while Trump said talks were on and Chinese President Xi Jinping spoke to him. The Chinese Foreign Ministry denied any such talks between the two Presidents.
China’s softening stand on the tariffs came amid reports that imported goods from China valued at USD 800 or less sent through the postal network began to be subjected to a duty of either 90 per cent of their value or USD 75 per item – with that to increase to USD 150 per item after June 1.
Small parcels shipped via e-commerce companies have become a key engine of China’s export growth in the past few years, filling the void left by dwindling wholesale orders from the US due to previous tariffs.
Also according to media reports a number of ships carrying goods to the US started to return back as the new tariffs came into effect.
China is the only country to have retaliated with tit-for-tat levies. For China, the US is the third largest export market.
Despite China putting a brave front, there is considerable concern about the impact of Trump’s tariffs on China’s economy, which is struggling with slowdown due to falling exports, low domestic consumption and collapse of the housing market.
The US-China trade war had the trappings of a spill over affect against the rest of the countries as China on April 21 threatened to impose countermeasures on countries seeking to strike trade deals with the US at its expense in order to get American tariff exemptions.
The trade war between the two major economies can have a rattling effect on the emerging economies across the globe as China too will target countries with harsh tax imposition if these emerging economies try to work out a deal with the US.
This arrangement will benefit none and in return will have a dampening effect on the already stressed world economic order.
