World Should Be Ready For The Trade War
Yesterday after having had my breakfast i wanted to go through the international news, So opened the BBC News website. While i was reading the news i got stuck at one place. The big and the terrible news was that
US is going to introduce billion dollars taxes/tariffs on imports from China as well as EU (European Union) and some other countries. So China, EU and those other countries are also planning to impose duties/tariffs on the imports from US in retaliation.
www.bbc.com, images
This trade war will definitely affect the whole world. Stock Markets are already getting affected. Last year Trump abrogated Trans-Pacific Partnership Trade Pact (TPP) and announced the withdrawal of US from the treaty which was concluded for the exchange/trade of goods decades ago.
Objectives of the President Mr. Donald Trump
President Trump actually wants to prevent the flow of technology and intellectual property to China. He said that we can not tolerate the advancement of China any more. He said that the imposition of tariffs on the imports will make it costly and then American will buy cheaper American products, hence the local industry will flourish and jobs will be created.
Effects of tariffs on China and the Chinese retaliation
In January Trump announced the withdrawal of the Us from the TPP and renegotiate North American Free Trade Agreement (Nafta).
In June Trumped announced that Us will charge 25 % tariffs on $ 50 billion worth ((£38bn) of Chinese goods (such as aircraft tyres and commercial dishwashers). The first tariffs will come into force on 6 July.
China took the same step of imposing 25 % taxes on the imports (such as agriculture products, cars, and marine products) of $ 50 billion worth from the US, starting from the exact same date of 6 July.
Trump further threatened china with imposing additional 10 % taxes on $ 200 billion worth Chinese goods and ordered to make a list of all Chinese goods to be taxed.
And of course the Chinese also added that they will take counter measures. The fact is that the size of imports from US to China is 4 times greater than the size of imports from China to Us. So China might get hurt more as compared to Us but China will try to find some alternative markets for their products. They might reduce the value of their currency which will make their goods cheaper for the foreigners to buy.
Tariffs on EU, Mexico, and Canada and its results
US is also going to charge taxes on imports such as steel and aluminium from EU, Mexico and Canada. The charges on steel will be 25 % and on aluminium will be 10 %. EU, Canada and Mexico are not sitting quite as they are going to charge.
EU
EU is going to charge taxes on €2.8bn (£2.5bn) worth of US products such as jeans, motorbikes and bourbon whiskey on 22 June.
Canada
Canada is going to charge taxes on C$16.6bn ($12.5bn; £9.5bn) worth of US product (25 % tax on US steel and 10 % on yoghurt, whiskey and coffee etc.)s on 1 July.
Mexico
Mexico is palnning to charge 25 % duty on US steel, pork and cheese etc.
www.bbc.com