Why Donald Trump’s Trade War Will Fail
It’s not long since USA’s president, Donald Trump had campaigned for election on promises of fairer trade. And in doing so, USA has been in a fight with some of its oldest trading partners. In recent times, in September this year, the US has imposed three rounds of tariffs on Chinese products, which now rose to $250 billion. Also, Donald Trump withdrew from TPP, Trans-pacific Pacific Partnership, last year. This marks a striking yet fresh change, and this might end the free trade policy.
Problem to world
The trade war, between China and USA, could affect all economies around the world. China even accused the US, of launching the largest trade war in known economic history. If the tariff war continues like this, then this will commence the end of China’s export to the USA, as duties will spike to an unimaginable level. The trade war may or may not benefit the US or China, but it will certainly affect the world economy. This has led to many citizens losing jobs in the US and China.
Why such tariffs?
Mr. Donald Trump is doing all this to make US-made products cheaper than the imported ones. Generally, China made products are cheaper and tariffs if applied will make them costlier. This could boost US businesses and could also support the national economy.
But this is not all. Even US companies have testified against this trade war of Trump. As China is also increasing tariffs on its US imports. This all started when controversial tariffs were slapped on imported washing machines and solar panels.
China showed a record trade surplus.
In Spite of all the tariff hike, China recorded a trade surplus again. This shows that Trump’s strategy is failing. Though the trade deficit will shrink in the coming years, it’s not showing any sign for now!
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