The US-Chinese trade war is closing in on a vicious circle. The administration of Donald Trump announced the introduction of duties on Chinese goods in the amount of 200 billion dollars a year.
Despite an agreement on a new round of trade negotiations, for which the delegation of the Chinese Ministry of Commerce was going to Washington, Trump rejected the recommendations of the advisers and imposed a tariff on the new batch of Chinese exports, including aircraft engines, electronics and fish products. About 40% of American purchases in the PRC and 2.5% of world trade are under attack.
The White House reports that for months it has called for China to abandon unfair trade practices, including the field of intellectual property, such as forcing US companies to transfer technologies, but at the moment China has shown an unwillingness to abandon previous methods.
Duties of 10% have already entered into force and can be increased to 25% from January 1, if the PRC does not make concessions. Moreover, if China steps back against American farmers and industrialists, the White House will immediately move to the third phase, which includes duties on goods for another $267 billion.
The situation around duties develops on the principle of a chain reaction: a new round of $200 billion from Trump was a response to China’s duties in the amount of $50 billion, which in turn was a response to the first phase of US duties.
Half of Chinese exports to the United States are already involved in the trade war, and the further aggravation of the situation is almost guaranteed. The Ministry of Commerce of China announced that it intends to protect its market with similar measures.
Trump set a goal to halve the trade deficit with China to $200 billion by 2020. The presidential administration is under pressure from a falling rating – Trump is supported by 38% of Americans. This is less than any president over the past 70 years in the second year of his stay in the White House