The giant economies are tangled into war with the two biggest nations China and US battling for supremacy. The tension is further fired by the sentiments given by Trump that the United States will impose a hefty levy on China’s imports. The tariffs added are of 10% to goods of around $200 billion in the next week with an expected double rise come next year. In the simple understanding of the riddle, it means Trump has affirmed the long-term battle with rival China without considering the aftermaths. However, the promised additional of tariffs is not the first one from Trumps administration. This year, the United States has levied china twice with a retaliatory response from the antagonist. Contrary to the previous plans, which were followed by reprisal, Trump has espoused a stricter deportment that provides no room for revenge.
What is more, the president of America has clarified his warning that in case the Chinese plot to retaliate, a harsh reaction should be expected from his side. In the past, the Asian country has threatened to attack farmers and industries of the United States. Furthermore, China vows to target the liquefied gas used for aircraft by adding a levy of around $60 billion according to the report given by Trump. However, the US president says the threats are featured, and they will go on to impose the levies anticipated. Trump also adds that over $267 billion will get increased as tariff when China strikes back. Nonetheless, the news seems to have landed on deaf ears as China has already pledged to retaliate. Thus, expectations are that China is going to announce new levies imposed on Americans.
Practically China is fighting a losing battle unless they use tactical ways to win. The goods imported from them by the US in 2017 are of around $506 billion compared to the $ 130 America imported from China. Thus, in this big scenario, when the sum is calculated the Chinese are going to lose the war in the case the levy addition play is continued. Nonetheless, with a vast number of American companies investing in the Asian country, China can use it as a fighting tactic by attacking the industries.
According to China security regulatory commission vice chairperson, the economy of China may reduce by a margin of around 0.7%. The dropping will come as consequences of the added tariffs on all imports from America. Nevertheless, the vice chairman points out that the GDP drop is insignificant since it can get recuperated by building or expanding a new trade relationship. Also, he admits the current impact may turn out as intense compared to the past ones.