Sino-US trade war

THE United States and China have opted for a tit-for-tat policy in their trade relationship sparking fear that the expanded trade war between the world’s two largest economies could negatively impact the global economy as well. Just hours after the Trump Administration unveiled a list of $50 billion of Chinese goods on which the White House plans to impose 25% tariffs, China hit back with its own list of 106 US items, including soybeans, corn, cars and aircrafts that it would also target with tariffs of 25% if the US does not back down.
As part of its trade protectionism policy, pledged by Donald Trump during his election campaign, the Trump Administration first withdrew from the Trans-Pacific Partnership (TPP – an ambitious trade agreement signed by 11 Pacific rim nations) and now the plan to lower trade deficit with China is creating uncertainty not only for economies of the two countries but also for other nations that could be directly or indirectly hit by the new trade war. It is said that China’s stated intention of seizing economic leadership in advanced technology as set forth in its industrial plans, such as ‘Made in China 2025” is at the core of the dispute between the two countries. Made in China policy is aimed at replacing most of the foreign technology it imports with locally made components and obviously Beijing is within its right to pursue this national objective as is the case with many other countries that are focusing on indigenisation. However, the West feels that the Chinese programme would help it dominate the world in every discipline of economy and technology. Whatever reasons and apprehensions, sanity demands that the two sides should exercise restraint, as there would be no end to the policy of action and reaction. A meeting between President Trump and his Chinese counterpart in April 2017 helped ease out tension between the two countries and differences can be managed by entering to aggressive talks. This is because consumers in two countries would be hit hard especially those in the US that have been benefitting from low cost Chinese products but given globalised supply chains, the ramifications would be felt by producers and consumers in many countries.

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