A trade war between the US and China is not a threat but a reality

When Donald trump came to power in the United States, he began to reform the economy. In particular, new laws and reforms intended to large us companies returned production to their home country.

Also in March of this year, trump signed a Memorandum of restrictions on trade and investment with China, which many have called the beginning of the economic war with China.

However, if you had any doubts about correctness of such language, but now they seem gone. Trump has decided to impose customs duties on some products imported from China. Moreover, these duties reach 25%, and the list of products includes more than 800 items worth over $ 50 billion. Duties will begin to charge from 6 July.

And all is good, Yes, but China did not hesitate to answer and has already announced the introduction of similar duties. And duties are exactly the same and for the same amount, except that the positions a bit smaller: 659.

And, apparently, this is not limited, as trump warned that if China responds to US move, the States will increase taxes. And China has already responded, so it is logical to wait for the promise. This means expanding the list of goods to a total sum of 100 billion dollars.

The tramp says that all of this is necessary in order to prevent the unfair transfer of American technologies and intellectual property to China.

All of this for you and can seem somewhat distant and not having to us any influence but that is not so. Even existing raising taxes enough to certain companies in the US and in China are faced with the need to increase the cost of the sanctions the goods. But if companies need to increase spending, they compensate for this by increasing the value of their products.

But the conflict is unlikely to end at this stage, given the promises trump. This means the escalation of a trade war that will lead to further rise in the number of products and extension of the list of these goods. Among other things, the experts are saying about the “Domino effect” when a conflict between two countries in one form or another will tighten and the other States that can cause substantial changes in the world economy as a whole. Of course, this is one of the most extreme scenarios, but, given the expressiveness of the trump and the rigidity of China, you can expect anything.

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