Is there a trade war in the US’s future?
The Trump administration announced it will impose a 25% tariff on $50 billion worth of Chinese goods this Tuesday.
The list of goods is yet to be announced, but if rumors hold, this could include automobiles. The list of imports will be released on June 15th.
However, that is not the only facet of the proposal. The White House will also limit Chinese investments on US technology firms. A more detailed report of this policy will arrive June 30th. Likely, this means that the US will not lift its ban on Chinese firm ZTE.
This proposal came completely out of left field, as administration officials have been trying to mitigate the possibility of a trade war with China. Chinese and American officials have been in discussion for weeks now; in fact, the countries agreed earlier this month that they would not impose tariffs any time soon.
Chinese officials also told US representatives that the country would start buying more US goods to establish more trade balance.
This announcement is surprising, and it could cause the trade war that both countries were trying to avoid. Moreover, this could cause a chain reaction in the world economy, sending it into a frenzy.
Featured image via Flickr/Gage Skidmore
