US-China Trade War Escalation Looms in the Horizon

Media resources have reported recently that President Donald Trump will impose a 10 percent tariff on a $200 billion in Chinese goods, which will go up to 25 percent at the end of the year. Does this mean the US-China trade war is escalating? What can China watchers expect?

18 September, OctaFX – After the close of business last night, Trump’s Administration confirmed that a 10% tariff would be applied on another $200 bln of Chinese imports from September 24, notes the research team at Rabobank.

Is The US-China Trade War Escalating?

Not only was it threatening, that this tariff could be lifted to 25% by the end of the year, but the US also warned that if the Chinese were to take retaliatory action against US farmers or industries, it would “immediately pursue phase 3”. This would involve tariffs on an additional $267 bln of Chinese goods.

Despite the US threats, or perhaps because of them, many China watchers expect that the country has little option but to stand firm. The South China Morning Post has reported that the government’s delegates may not travel to the US to participate in the trade talks being backed by US Treasury Secretary Munchin.

Bloomberg, however, reported that Chinese Vice Premier Liu was due to hold a meeting today to discuss the government’s response. Other reports suggest that the anger of China’s middle classes is being redirected from its own government to the US which is perceived as acting to contain China’s growing economic importance.


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