Business tension between the US and China has been in the news since 2018. The root of this dispute is associated with trade balance, technical transfer and industrial policies between the two countries. In April, US President Donald Trump increased the tariff on Chinese goods by 145%, in response to which China imposed a 125% duty on US imports. This became a situation in which the economy and global supply chains of both countries came under pressure. The two sides agreed to temporarily reduce tariffs after negotiations in Geneva and meetings in London in June. However, this relief proved to be short -lived, as the deadline for putting high tariffs again in August was approaching.
According to the Reuters report, an official of the White House confirmed that President Trump has extended the tariff’s deadline for 90 days by signing an executive order. This decision was taken by Trump a few hours after postponing the questions of journalists, in which he was asked if he would carry forward the deadline of August 12. Trump appreciated China’s cooperation on the occasion and said, “We will see what happens.” This indicates that the conversation between Washington and Beijing is still going on and both sides are looking for a permanent solution.
Current tariff rates and economic impact
Currently, 30% tariffs are applicable on imported goods from China, including 10% Aadhaar rate and 20% phynell-related additional tariffs. These tariffs were imposed by the US in February and March. On the other hand, China has reduced its rate on US imports to 10%. Economic analysts believe that tariff expansion will not only affect the GDP of the two countries, but will also increase uncertainty in global markets. Investors will adopt a cautious stance, while the cost of companies dependent on import-export may increase.
Potential future and global reaction
If there is no concrete agreement in the coming 90 days, then the tariff rates can again go to a higher level, which can lead to a huge decline in global trade. America’s leading business partners and international institutions such as WTOs can try mediation to end the dispute. Experts believe that this deadline expansion is a strategic break, which will give the two countries a chance to resolve issues through dialogue, but if the agreement is not reached then it can start the “Trade War 2.0”.
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