Image Source : Business Standard
China has pledged to take countermeasures against the United States to protect its interests after President Donald Trump threatened to impose an additional 50% tariff on Chinese imports. The Commerce Ministry described the US’ imposition of “reciprocal tariffs” as “completely groundless” and a “typical unilateral bullying practice”. This latest development has raised concerns about the potential escalation of a financially destructive trade war, causing instability in global stock markets.
The US threat to increase tariffs on China has sparked a strong reaction from Beijing, with China vowing to “fight to the end” if the US insists on its proposed tariffs. Trump’s threat came after China announced plans to retaliate against US tariffs imposed last week. If implemented, the new tariffs would bring the total US tariffs on Chinese goods to a combined 104%, potentially increasing prices for American consumers and driving China to seek deeper relationships with other trading partners, such as the European Union.
The trade tensions between the US and China have significant implications for the global economy. With China being one of the US’ top trading partners, especially for consumer goods, the tariffs could lead to increased prices for American consumers. The Federal Reserve has warned that the tariffs could also fuel inflation, prompting a wait-and-see approach before making any decisions.
The escalating trade tensions have drawn reactions from global leaders. European Commission President Ursula von der Leyen has expressed interest in exploring trade opportunities with countries other than the US, citing vast opportunities elsewhere. As the situation unfolds, the global economy is likely to face continued uncertainty and instability.
