Since President Trump’s administration imposed new tariffs on steel and aluminum in May, trade wars have escalated over the recent past. The move received a lot of criticism and objection from the US trade allies threatening to retaliate. The EU was the first to respond followed by China as well as other EU states. The administration is making changes to some policies that are against human rights such as separating children from parents at the Mexican-US border. The changes in tariffs have affected the Forex industry with currencies losing value. In June, the Trump administration limited ZTE, the Chinese American-based tech giant firm, from conducting operations. Earlier this month, President Trump met with president Xi to discuss on lifting the ban. In as much as the dialogue was successful, ZTE resumed operations partly. According to Reuters report, China is the primary target for the US in the threatened tariffs amounting to $34 billion on goods.
The threat on duty commences on June 6 in both China and the US with Beijing having a twelve-hour benefit on Washington. China announced a retaliation against President Trump’s 25% levy. Washington has threatened to inflate the scope of the taxes to a $450 billion. The US tariffs target products such as LED light bulbs, vaping devices, and rare earth metals. As reported by Reuters, China imports to the US, that are consumer goods, accounts for 1% of the 1,102 sets of products. The remainder covers intermediary or capital products that are taxed with the aim of making American firms’ supply chains less dependent on Chinese imports.
Beijing’s targets on Washington comprises of wheat, rice, dairy products and pork. This year, as reported by the South China Morning Post, the country will probably cancel soybeans orders that amount to $1.1 million from the US. A CNBC report shows that approximately half of soybeans exports from the US goes to China. They account for an annual income of $14 billion. Lu Kang, Chinese Foreign Ministry spokesperson, gave a statement that the move is a counterstrike in the heightening trade wars. Lu said China is prepared to retaliate against the US tariffs with essential measures that guards its appropriate interests. In their opinion, the US Chamber of Commerce said that the duties that have caused trade battles will, in the long run, injure American consumers. When the effect is uncertain, a delay in selling inventory is an expectation. China and the EU are meeting on July 16 and 17 in Beijing where China is looking for a mutual action against Washington by the WTO. The EU was reluctant to comment on that.