By Stephen Ubanna
These may ignited the trade war, forcing the North American country to send a signal to Xi Jinping , the Chinese Premier, that the American government has increased tariffs on 200 billion worth of China products to 25 percent . This is in addition to ordering the start of a process that could facilitate the imposition of higher duties on another 300 billion of china manufactured goods entering into the North American country economy.
Many believe that the tariffs imposed on the China products , in theory”, would make US goods to be cheaper than imported ones from China and thus encouraging importers from Europe, Africa and other parts of the world to buy made in US products.
The Trump Administration was said to have targeted eight china products to be affected by the tariff increase. They are children’s bikes, animal medicine, Baby Cots,roof tiles,fridges, dehumidfiers and air conditioners, car tyres, hadbags and luggage. There indications that the Southern Shrimp Alliance, a Company based in the US, which had welcomed the punitive tariffs on the China products are even appealing to the US President to further increase the tariff to make china goods unattractive in the country.
He may have bowed to pressure to further increase the tariff on imported China goods as he was said to have began the process of expanding the country’s tariffs to cover all $540 billion imports from the Asian country, which people fear would raise the prices of everyday products such as cell phones, sunglasses, cameras and televisions.
The US President may have been forced to take such a harsh economic measure against the Asian economic giant because of the latest round of trade negotiations between the two countries on a number of American goods which could not make a headway. That much was contained in a Statement issued by the Tariff Policy Commission of the State Council- China’s Cabinet.
Already China has made it clear to the US government that they would not be forced to bow to external pressure to toe the line of their trade policies. That much was said by the spokes person of the foreign Affairs ministry of China, which was said to be at the at the instance of the minister.
The Asian country may have told Trump , the US , President, that they would not hesitate to fight back by imposing higher tariffs on $60 billion worth of the North American country goods entering the Chinese economy from June 1, 2019. The Chinese government, according to sources hard targeted to impose the punitive tariff on products including chemicals, Coal and medical equipment, with Levies and duties and levies that range from 5 percent to 25 percent
It was said to have also targeted products with strong support for the Trump Republicans as well as goods that can be purchased elsewhere , particular soyabeans. Officials of the China ministry of Finance may have summed up the reason for the Chinese government action stressing that it was targeted at breaking ”US unilateralism and trade protectionism”.
The US President may have known the implication of the Chinese government engaging his country in a trade war that he pleaded with the Asian country not to retaliate by initiating punitive duties on American imports into the country. He fears that if the country should retaliate in imposing higher tariffs on its exports into the country, its economy will get worse.
An aggrieve Trump who is not happy that the two days of talks to resolve the trade disputes between the two countries ended without reaching any reasonable agreement has made it clear to those that care to listen including the Chinese officials that American Companies based in China will close down their factories if a trade deal was not reached quickly to address the raging trade problem between them.
Trump may have made known his feelings in a recent tweet where he declared: I say openly to Jinping , the Chinese President and my other friends from China that the country will hurt very badly if they don’t make a deal with the US because” American Companies operating in the Asian country would be forced to the leave China to other countries ”.
The US government may have found a way out to deal with the Chinese government which had entered into Currency Swap deal with many countries including Nigeria to use the Chinese Yen instead of the US dollar in financing trade transactions and investment between the two countries.
Many believe that if the trade dispute between the two economic giants are not quickly resolve, US, purpose of initiating the trade war may be achieved as manufactured goods, particular Computers and mobile phones would be too expensive to buy from China, by importers from countries, who had entered into Currency Swap deal with the Asian country. Trump had mocked Jinping of China, ” you had a great deal which was almost sealed but you backed out”.
He maintains that tariffed Companies will be leaving China in their hundreds to for Vietenam , Hunkong and other Asian countries to open up new factories. He is optimistic that there will be nobody left in China to do business with by their Asian, Europe and African countries Customers. That would be very bad news for China and very good news for the US”, he had said.
Despite Trump’s impression that the China economy would be worst hit in the trade dispute, described as the largest trade war in economic history, both the US and other international firms are no longer finding it funny in their operations as they have raised alarm that they are being ”harmed”.
Business analyst fears that the US citizenry would be the worst hit in the trade war with war. This is because the impact from the punitive tariffs and levies that would be paid on the imported manufacture goods which are paid by the American importers would be passed on to the Consumers, an indication that the prices of goods and services would go up , which may fuel inflation in the country and subsequent crash of the dollar in the foreign exchange market.
The price hikes are already being contemplated upon at target Cosco, Home depot, and Walmart, according Nelson Dong, a partner with Dorsey and Whtney in Seatle, that may be passed on to the consumer ‘ to recover their costs of importation. Perhaps to cushion the effect of the tariff war on American citizens, the US President has boasted that his government is collecting hundreds of billions of dollars in revenue from import duties as he plans to use $15 billion of the collected revenue to bail out farmers suffering from lost sales to China. ”Our farmers will be very happy, our manufacturers will very happy”, he had said.
Global market analysts on their part fear that the trade war between super powers and economic giants , however, warn that it would shatter global economic growth, particular, the economies of Organisation of Petroleum Exporting Countries, OPEC, member countries, as it would hurt the demand for oil by the two major consuming nation.
Note that the World Trade Organisation , WTO, has warned of a ”global trade crisis ahead if the China-US trade war was not quickly settled by the parties before it spread to other countries that may trigger another round of recession in many weak economies, like Nigeria that may not be able to absolve the shock. Over 70 percent of the imported goods into the Nigerian market are currently from China and India while about 12 percent are from the US.
It is not surprising why the world