Donald Trump’s intensified trade attack on China has reignited fear of a protracted economic battle between the two biggest economies in the world. Trump has vowed to reinstate high tariffs on Chinese imports, causing a rise in the tensions that had eased under the Biden administration. Analysts caution that a new round of trade war might lead to inflation, destabilize global markets, and hurt firms and consumers globally due to the possibility of increased tariffs, supply chain disruption, and retaliation actions from Beijing.
The two big economies have already exchanged blows in what may turn out to be a brief trade disagreement with little economic impact or the beginning of yet another drawn-out and agonizing trade war reminiscent of President Trump’s first term.
China retaliated by announcing 15% tariffs on some of the goods it imports from the US, including some types of coal and liquefied natural gas, and a 10% tariff of crude oil, agricultural machinery, and large displacement cars, and pickup trucks, just after a new 10% tariff on all Chinese goods shipped to the US went into effect recently.
Global supply chains were upset by the first U.S.-China war, which compelled companies to move their manufacturing and look for new suppliers. A resurgent conflict would once again impede international trade, resulting in delays, shortages, and higher prices for producers and merchants.
Due to concerns about supply chain interruptions, lost profits, and economic instability, many American companies are against the resumption of trade conflicts. A return to extensive tariffs has been cautioned against by the US chamber of commerce and other trade groups, which are asking politicians to look for other options.
China is not going to take a backseat to additional levies. Beijing has imposed retaliatory taxes on American manufacturers and farmers in past trade disputes. China may retaliate if Trump reintroduces aggressive trade measures, further harming US sectors that depend on the Chinese market.
