The Trump administration is set to impose tariffs on $200 billion of Chinese imports although it is not yet clear whether they will be placed at 10% or 25%. This comes after the 25% tariffs imposed on $34 billion and $16 billion worth of Chinese goods over the past two months. Beijing hinted that it would respond swiftly in a similar fashion.
According to reports by CNBC, major stock market indices recorded declines over news that the US government has readied another round of tariffs on $267 billion worth of Chinese products. The Dow Jones Industrial Average dropped over 120 points while the Nasdaq Composite and S&P 500 fell 0.2% and 0.3% respectively during the Friday morning session.
The tariffs are deemed as an attempt by the US government to get China to change its trade policies meaningfully. However, some economists have opined that tariffs are not a solution to trade deficits while also predicting that the current trade tensions could continue for another two years.
A group of technology companies has requested for exemption from the tariffs claiming that the higher prices would affect everyone in the industry along with customers and also hurt profits and development.
Meanwhile, a report by the Wall Street Journal says that President Trump is planning to take the tariff fight to Japan. The president is said to have indicated that the third largest economy, which makes significant vehicle exports to the US, would be the next to face tariffs. Apart from China, the Trump administration has imposed tariffs on Canada, Mexico and Europe.
Amid the trade tensions, a positive jobs report brought optimism over job growth and wage increases but the growth in earnings raised concerns over changes in monetary policies. There are also possibilities of rate hikes by the Fed this year.
Trade war: Fresh Chinese tariffs dim hopes for near-term resolution