Tariff War Starts Between the US and China; Global Economy to Suffer Massively

This week marks the beginning of a global tariff war, with both China and the US imposing hefty tariffs on each other and showing no signs of retreat.

- ANSHU JOSHI

The impact of these tariffs on China is already evident, as market values are experiencing a decline. The imposition of a staggering tariff by Trump on China, coupled with China's retaliatory 84 percent tariffs on American goods, has once again unsettled the markets. Many are worried that a tariff war between the US and China could have detrimental effects on the global economy, given that these two nations collectively represent nearly 43 percent of the world's economic output, according to the International Monetary Fund.

Though in light of the complex challenges posed by a global market downturn, Trump has now unexpectedly decided to suspend tariffs on most countries for a period of 90 days, despite increasing the tax rate on Chinese imports to 125%. Following this announcement, US stock markets experienced a significant surge. Trump's strategy includes a foundational tariff of 10% on all imports, which remains unchanged, while imposing steeper tariffs on nations identified by the White House as the 'worst offenders' in terms of unfair trade practices. This list encompasses European Union, Vietnam, South Africa, Canada and more. Additionally, he has reiterated the implementation of 'reciprocal tariffs' on India. The experts believe that this tariff conflict could lead to higher prices for American consumers on one hand, and hinder China's efforts to stimulate its faltering economy on the other hand.