Categories Analysis, Markets

There is more to come on the US-China trade war front

The trade dispute between the US and China took several interesting twists and turns during 2018 and experts believe the aftermath of the trade tensions will continue into 2019 as well. Both countries are expected to have another round of talks in early January.

After imposing several rounds of tariffs on each other during the year, the US and China agreed to a temporary truce nearly a month ago. The US agreed to put the next round of proposed tariffs, which were set to take effect on January 1, on hold while China in return removed tariffs on US automobiles and cut import duties on a range of other American goods.

Although China hopes for the tariffs issues to be solved, it believes the US will put forth some demands for this to take place, and the Asian country is said to be taking the necessary steps to prepare itself in case the discussions do not go as expected.

Huawei and Apple take hits amid US-China trade spat

The trade dispute has affected businesses in both countries. In the US, some businesses have reportedly been facing more regulatory hurdles leading to delayed shipments and lost sales. During the year several companies said they were looking to shift production out of China to avoid hefty tariffs.

The tariffs will lead to increased prices in the US and lower demand for Chinese products, thereby taking a toll on China’s exports and its economy. The stock markets in both countries have been facing volatility due to the ongoing trade issues.

It remains to be seen how the talks turn out and what measures both countries will resort to during the coming year but if the trade dispute continues, it will definitely put pressure on businesses and the economies in both countries.

 

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