China Shows No Fear, Promptly Retaliates on U.S. $60bln. Imports

Not before long after the U.S. had imposed 10% tariffs on $200bln. worth of Chinese goods on Monday, September 19, 2018, China has countered with imposing 5-10% on $60bln. worth of U.S. imports – ranging from liquefied natural gas to certain types of aircraft as well as cocoa powder and frozen vegetables – on the day after. Both countries’ tariffs come into force on Sept. 24.

 

“China is forced to respond to U.S. unilateralism and trade protectionism, and has no choice but to respond with its own tariffs,” said the Finance Ministry of China.

Jack Ma, Alibaba’s founder and chairman, said that the trade war between these two countries could go as far as 20 years.

 

A tit-for-tat action from China to retaliate with the same action that the U.S. has done to them, but will the amount levied by China be able to do as much damage as the U.S.?

The U.S. trade deficit with China was $375 billion in 2017. A huge difference in deficit exists when the U.S. imported $506bln. from China, while only exported $130bln. to China.

The United States spent $77bln. to import computers and accessories, $70bln. in cell phones and $54bln. in apparel and footwear. A lot of these imports are actually from U.S. manufacturers that send raw materials to China for low-cost assembly. Once shipped back to the United States, they are considered imports.

Meanwhile, in the same year, In 2017, China imported from America $16 billion in commercial aircraft, $12 billion in soybeans, and $10 billion in autos.

 

When the U.S. received prompt retaliation from China, will Trump step up the tension by imposing another round of tariffs on $267bln. worth of Chinese goods?