The trade war between China and the United States is turning into a confrontation.
Starting with a negative trade balance with China, the United States is adopting a frontal approach in order to intimidate both the Chinese government and Chinese exporting companies in a position of strength on the American market.
This increase in tariffs, initially decided for a substantial number of countries, was finally suspended for 90 days for most of them except China.
Donald Trump’s latest proposed increase in tariffs on Chinese products sold in the United States amounts to 145%, with a recent exemption for certain technology products.
On the Chinese side, the tariffs on American goods, which had risen to 84% in response to the 104% previously decided by the American authorities, were recently increased to 125% in response to the American increase in tariffs on Chinese goods to 145%.
The consequences of this trade battle were not long in coming for the global economy, with a significant fall in European stock market values in particular.
Overall, the prospect of a lasting confrontation between the world’s 2 leading economic powers is worrying both business and politicians.
This political and economic confrontation could have unpredictable effects.
It remains to be seen whether the latest developments in this rivalry are merely intimidating postures, or whether they have a lasting effect, particularly on the American side.
Significant consequences could also be felt by populations worldwide, particularly those in the countries concerned.
An increase in the general level of prices, accompanied by a fall in production growth and a rise in unemployment, cannot be ruled out.
There is also considerable uncertainty as to the dollar’s global pre-eminence against the backdrop of the trade war with China.
Other currencies could act as safe havens in the medium term, bringing about a lasting transformation of the global economic system.
Sources :
L'Économie Internationale pour toustes 