US China economic war


What will happen now after the last threat from the US President to increase tariffs on Chinese goods? The markets reacted in a negative way today.

china business
United States of America
Global Markets
Paolo Beffagnotti
21 months ago

6 answers


I think this will not go very far. Time to time, super powers need to show each other their muscles. They have done it, The truth is both the parties can not afford to drag this for long.
The problem goes for small investors and dependent countries like Canada etc. Hence when the market fluctuates because of such political ego, they get the real burn.

Hitesh Mathpal
21 months ago
Good points Hitesh Mathpal. I agree that super powers need to show each other their muscles, I just hope this will not take too long otherwise could be a pain for smaller players - Paolo 21 months ago
But this proxy war between them is costing a lot to small businesses. - Maya 21 months ago
and to big businesses too - Paolo 21 months ago
Yes, noone can afford this for a long. Even USA as well. - Charu 21 months ago

This issue has already done a lot of damage that you can ever imagine. Trump administration could have think alternatives to deal with Chinese products. Increasing tariffs doesn't solve this problem. This is a short term or an easy way to show power. However, that can backfire and that is happening.

Maya Kharkwal MA, BEd
21 months ago
I hope markets will recover the lost value, at least a part of it - Paolo 21 months ago
The chinese are pragmatists and they take a long-term view. I believe that they know that this will pass and we will all move on. - John 21 months ago

Hello Paolo, markets tend to react and over-react to these types of events. My sense is the negotiations between China and the US are a process with some progress and setbacks...but ultimately a deal will get done. Trump's threats may delay negotiations but both parties will come back to the table at some point...

John Kaestle
21 months ago
Agree with you, hopwfully next meeting would be a step ahead - Paolo 21 months ago
Agree. - Maya 21 months ago

Global trade is threatened when the two largest economies get into a pissing contest. Win-win must be the way forward.

David Cottrell
21 months ago
Do you think they will find a win-win solution? - Paolo 21 months ago
DAvid, yes of course you are right. Any lasting agreement that both parties embrace must be win-win. The challenge is getting to that special palce where both parties agree on paper (and with langaugae translations!) and they are prepared to enforce and live up to the commitments. It sounds like there was some backtracking from the chinese - John 21 months ago
Sorry for the typos- i could'nt see and edit after i typed.. - John 21 months ago
Paolo Beffagnotti There has to be a compromise that suits both parties. Will the ratio of win-win be 50:50? I doubt it but any % win is still a win, right? - David 21 months ago
yes it is David Cottrell, anything is better than nothing. Nothing will just turn in a big loss - Paolo 21 months ago
So far, Trump has escalated US trade tensions with China once more, threatening to again raise tariffs - Paolo 21 months ago

Tariffs have a negative impact on everybody, the manufacturer, but also the retailer and consumer. The last have a preference for products from China (due to price), but not government interferes, so they have to pay more for the same or other goods. As consequence that can buy less with their given budgets.

As trade war is against macroeconomic logic, it include many emotions. For this difficult to predict how it will continue, but of course all countries get affected.

Patrick Henz
21 months ago
So far the economic war is still on, earlier Friday, the U.S. increased tariffs on approximately $200 billion worth of Chinese goods from 10 percent to 25 percent - Paolo 21 months ago

Trade war is not new, however this time it has gone longer. Hope, both the parties will understand and look their balancesheet carefully.

Charu Gulati
21 months ago
Let's see what will happen in the coming days/weeks - Paolo 21 months ago

Have some input?