Global tension: US and China launch unpredictable trade war tomorrow – 05/07/2018

After months of threats and vain attempts to avert a devastating trade war between the United States and China, the conflict finally broke out and it is feared that it will be extremely costly for the economy delicate world. Starting tomorrow, the Donald Trump government will impose 25% tariffs on Chinese goods worth $ 34 billion, which will immediately activate Beijing's retaliation with the application of reciprocal measures of identical dimensions.

The dangerous escalation of the trade conflict between the two largest economies on the planet has caused serious concern worldwide because it is held out that it will slow down the current slight growth. The confrontation even threatens the Europeans, who could be caught between the two fronts

This first series of US tariffs includes 818 categories of imported goods, among which they include components of the industrial and technological supply chain, but also consumer goods such as LED lamps and electronic cigarettes.

Bloomberg badysts have calculated that, with these measures, the 2019 Gross Domestic Product (GDP) – this year is expected to grow 6.5% this year – could decelerate by two-tenths.

China's announced response to US punishment includes sanctions against 545 US products, including pork, wheat, dairy, rice and soy. These last two foods are essential in this Asian culture

According to projections by the Peterson Institute for the The International Economy (PIIE), based in Washington, the measure will affect specific sectors and US companies. Specifically, badysts say that this will lead to job losses, slowing investment and rising prices in the United States, among other effects.

"The United States provoked this trade war," Chinese Trade Ministry spokesman Gao Feng warned that the Asian giant would not bow to "threats and blackmail" and that despite the fact that he did not want war, "he was forced to retaliate".

% of products worth $ 34 billion subject to additional tariffs are manufactured by foreign companies in China, of which the Americans account for a considerable share, "said Mr. Gao." In essence, the tariff measures of the United States undermine the industrial chain and the world value. "The Chinese official was categorical:" In other words, the United States fires at the world. whole and they shoot at each other. "

consequences in the economies of the two countries, the US trade war and China will affect the functioning of world trade, as expected by many multilateral organizations, including the International Monetary Fund (IMF).

Mónica de Bolle, researcher at PIIE, explained that "today the trade" is very inte interconnected globally ", so this economic conflict" will create instability and increase the level of impairment in the global system. "

After this first round of tariffs could be another hardening of the conflict, as Donald Trump will decide in mid-July on the imposition of duties on Chinese products of a value of 16,000 million additional dollars, which would begin to be applied in August The President justified this action alleging the theft of technology.

On the other hand, in response to the Chinese retaliation, Trump threatens additional rights of 10% on d & # s 39 other Chinese products worth $ 200 billion.In total, this would mean half of all imports from China to the United States

Trump leads a crusade against the huge deficit His country's trade on several fronts.In addition to China, the European Union is also targeted.The President threatens the bloc with new rates on vehicle imports.

The consequence of this war is that it will have a negative impact on US growth. and China affecting the satellite countries of international and world trade, since the two powers are the engines of the global economic flow.