The US announced a more than two-fold increase on tariff on $200 billion worth of Chinese goods imported in the US. As things stand now, tariffs have risen from 10 percent to 25 percent for US importers, which means higher costs to be paid by the American consumers for Chinese goods given that importers would surely be passing on some of the burden to the buyers.
China described the move as unfortunate and said they will be forced to look for countermeasures to offset the tariff hike. The country also said they are still hopeful of reaching a settlement to sort things out soon. American and Chinese delegations are already in Washington to discuss the matter.
The US imported some $539 billion worth of Chinese goods in 2018 while American exports to China stood at $120 billion last year. Trump has always been sceptical of Chinese business strategies and has made it a poll plank of dealing with China effectively.
The trade war too was least desirable even though the US is blaming the Chinese of not fulfilling its commitments. The World Bank and other leading economists have warned repercussions of the trade war could have a direct bearing on the world economy as well.
Among the key issues that the US and China have differences on is the Chinese intellectual property rules which the US say has a negative impact on US firms. The huge trade imbalance in favor of China is also another issue that irks Trump no less.
It remains to be seen how China reacts to the development as less demand for Chinese stuff from American consumers can also effect its economy in the long run.