Warring presidents Donald Trump and Xi Jinping do have a chance to sort out things at the G20 economic summit in Japan scheduled for June. A meeting between the two haven’t been confirmed though, but at Larry Kudlow, Trump’s top economic adviser said, they might agree to a meeting given the point their trade differences have reached at the moment.
United States has increased tariff on $200 billion worth of Chinese goods, with the rate having gone up to 25 percent from the earlier 10 percent. Kudlow said they are expecting a Chinese retaliation soon, which might include a similar increase in tariffs.
What also can’t be ignored is that the impact of the trade war will be felt by both the economies. Importers of both countries will have to pay extra for the goods that are imported into their respective countries. The companies will also surely pass on the rate hike to the consumers, which means a hike in prices of goods such as toys, electronics and so on.
Kudlow however has said a similar tariff hike by Chine will have a very modest impact on US economy. In fact, he said the impact is going to be too meagre, which makes it quite worthwhile to give it a try.
Kudlow also stated the biggest stumbling block to a reconciliation happens to be China’s reluctance to take concrete steps to what they commit to. For instance, it could be far more fruitful if China makes it a law to bring into effect the changes both sides have agreed to.
However, before that, the US officials no doubt are eagerly awaiting the sort of response China makes to Trump’s move to hike tariffs.