US-China Trade War Escalates
The US-China tariff war feels like two countries are playing tennis with our economies, each serving and hitting harder each time. Both Presidents are not backing down, doing their best to hit hard and fast. In the latest tit for tat, Trump decided to increase the tariff percentages.
The current tariffs placed on $250 billion in imports will increase to 30% from 25%. This will take effect on October 1st. The remaining $300 billion that was set to go into effect September 1st, of which was mentioned a few weeks ago, will be raised to 15% rather than 10%. These new increases were announced just before China promised to retaliate – something we’ve seen over the last two years of this trade war. However, we don’t know if the President will allow this latest tariff to go into effect September 1st. About a week after the first announcement, the President postponed the tariff to December 15th, so as not to dampen Christmas shopping as some analysts called the tariff “the President’s war on Christmas.”
On top of the tariffs, Trump is requiring American companies to avoid doing business with China in all aspects, ordering them to look for alternatives. Of course, in light of this battle between US and China, stocks tumbled today. At closing, Down fell 600 points while the Nasdaq fell over 200 points. Investors are worried about a possible recession and this on-going war. These bumped up percentages on the tariffs has an effect on not only US and China, but globally and we’re seeing the aftermath in the global economy.
This increase in tariffs was in response to China’s announcement that they will hike their tariffs on $75 billion of US products. These products include tech and auto parts.
This consistent back and forth, an eye for an eye game the two Presidents are playing seems to have no end in sight. Not only are both economies feeling the brunt of the tariffs, but we could very well ruin the global economies. Both sides aren’t backing down and won’t take countermeasures quietly.