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China’s ‘Tit-For-Tat’ Policy an Indication of What’s in Store Next

Rising demand followed by a falling supply – the US-China trade war is once again set to bamboozle two of the biggest world economies. Momentarily steering in the right direction, it was expected that the two sides would reach upon a conclusion. However, the recently concluded negotiations went otherwise.

After the meeting, Trump announced raising tariffs from 10 to 25% (TNS) on Chinese goods. Retaliating to which, China said that it will also increase tariffs on nearly $60 billion worth of American goods (NYT). The move taken on Monday, suggests that US imports including beer, wine, swimsuits, and shirts, will witness a hike in price.

“I love the position we’re in,” Trump said, adding that the United States was “taking in billions of dollars in tariffs.”

The claims meant that the President deemed war as beneficial to the US, since a lot of money would be generated only through tariffs. Further, downplaying the strategic importance of China he also said, America is in much better condition and can easily tackle the rise in prices.

However, it is still can’t be drawn how the situation is advantageous for the Washington, especially when there are a lot of firms who directly rely upon Chinese imports.

Both Beijing and Washington though have still left a space behind for amendments. While, China has affirmed that it would delay the higher rates until June 1, Trump’s taxes affect only products sent to the US as of May 10. The situation, thus, leaves a two-to-four-week lag between the time commodities leave the Asian region, and arrive at an American port.

Contrarily, though is the fact that even with time in hand, no one can assure that there is some sort of solution for both the sides. Even last year, Trump vowed to impose a lot of restrictions, in order to completely isolate Beijing. Besides, portraying to implement trade practices, which would have compelled the US companies to give up their trade secrets, so as to access the Chinese market.

Thus, the situation is extremely fragile as ‘tit-for-tat’ has likely initiated once again. While China is limited in how much it can retaliate on America goods, it still has other measures to make the US pay. Nonetheless, neither has the war benefitted any side, nor will it ever, as the deadline to settle the mayhem draws closer.

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