Related: Trade tension intensifies; crude oil to fluctuate
The tariffs, which will be rolled out in phases with one phase set to take effect early next month, are said to be in retaliation to China’s unfair methods in acquiring U.S. intellectual property and technology and its reluctance in changing these practices. The new tariffs are subject to review like its predecessors and will be pushed forward if China refuses to mend its ways and if it proceeds with its own set of tariffs on U.S. goods, which are expected to affect agricultural products, seafood and cars.
The tariffs are said to be in retaliation to China’s unfair methods in acquiring U.S. intellectual property
However, experts believe that these tariffs are likely to hurt American consumers and businesses more by raising prices and making procurement of parts and components difficult. Chinese exports to the U.S. are far higher than the other way around and so Beijing would have to adopt other tactics to retaliate against Trump’s tariff war, like targeting services.
That possibility will prove to be a headache for many leading American companies that generate significant amounts of revenue from China like Apple (AAPL) and Boeing (BA). Apple CEO Tim Cook is said to have met the president and discussed the negative effects of the trade policies on his company and Trump appears to have assured him that iPhones will be spared from the tariffs.
Battered by the recent trade war tensions, European and Asian markets plunged today. Dow Futures tumbled more than 350 points. The commodity market was also badly hit by the turmoil.
A trade war with China is never a good idea and one of the reasons for this is that the U.S. depends extensively on China for healthcare-related products like vaccines, diagnostics equipment and even hearing aids. Some economists believe that the exchange of tariffs is not the right way to deal with China. They feel the U.S. should team up with its allies and rewrite the rules of trade with China if a fair deal is to be gained by all. Until that happens, this war is likely to go on.