US President Donald Trump's decision to impose an additional 10% tariff on Chinese imports has reignited global trade wars with Beijing's swift retaliation. China targeted agricultural and food products imported from the US with additional duties of 10-15% and announced export and investment restrictions on 25 American companies.
The Trump administration claimed that China was supplying the US with chemicals used in the production of fentanyl as justification for the tariffs, but Beijing denied these accusations. China's Ministry of Finance announced that as of March 10, China will impose 15% tariffs on chicken, wheat, corn and cotton imported from the US, and 10% tariffs on soybeans, sorghum, pork, beef, seafood, fruits, vegetables and dairy products. China's Ministry of Commerce, on the other hand, stated that the unilateral decisions of the US violate the rules of the World Trade Organization and damage economic cooperation, and gave the message that “Beijing will firmly protect its legitimate rights.”
Markets Nervous, Global Trade at Risk
The US tariffs are not limited to China. The Trump administration also announced 25% tariffs on goods imported from Canada and Mexico. Canadian Prime Minister Justin Trudeau announced that they would impose retaliatory tariffs on $107 billion worth of US goods in response to Washington's move. Canadian Foreign Minister Melanie Joly announced that tariffs on imports worth $30 billion would initially be imposed on basic consumer goods such as pasta, clothing and perfume.
Possibility of widening trade wars had a negative impact on global markets. US stock markets fell after Trump officially approved the tariffs. The Dow Jones declined by 1.4%, the S&P 500 by 1.75% and the Nasdaq by 2.6%, while the BSE Sensex and the NSE Nifty also decreased in India. Analysts warned of serious risks to global growth if trade wars spread.
Chinese state media The Global Times reported that Beijing may respond not only with tariffs on US agricultural and food products, but also with non-tariff measures. Mexico also announced that it would retaliate against the US tariffs, signaling that the trade war could deepen.
Trump administration, on the other hand, stands by its decisions, arguing that these measures were taken to combat the flow of illegal drugs into the US and irregular migration. However, these harsh economic measures are expected to have severe impacts not only on the target countries but also on the global trade and investment environment.
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