Beijing/Brussels – The latest dispute between the world’s two largest economies erupted on Tuesday as Beijing lashed out at Washington over a new tariff that is set to increase by more than 100% on select Hyundai imports, accusing China of ‘ignoring’ major domestic trade bullies while promising ‘sharp countermeasures.’
The Chinese Ministry of Commerce called the new punitive measures “un”-enlightened and beyond reason,” claiming it breached international agreements on trading and sought to dismantle global supply chains. “This is a case of undiluted bullying and is a form of protectionism that harms competition,” a spokesperson said in a statement.
The American cabinet has justified the new tariff by citing concerns over global subsidized competition and aid received by the dominating Chinese manufacturers in the region. The selected items on target include anything from electrical automobiles to solar power components. It is this focus that indicates the move is part of a broader policy shift aimed at China towards strengthening barriers on foreign competition.
Market jitters in Europe
These new tariffs have further escalated the existing trade war, impacting global financial markets. European stocks faced declines for the second consecutive session with the Stoxx 600 falling by 1.3%. Germany’s DAX slipped by 1.7%, while France’s CAC 40 fell by 1.5%, reflecting worries over the potential effects for European exporters trapped in the crossfire.
Experts are cautious of the back-and-forth exchange of words between Washington and Beijing, as it could cause a global trading crisis which is already influenced by inflation and declining manufacturing activity in the Eurozone.
Foreseen Moves By China
Although no specific retaliating actions have been stated by Beijing, follow up actions could be deemed as “strong” if the tariffs are maintained. The warning from the commerce ministry suggests possible sanctions against American technology companies or even American agricultural products stating, “China will take all necessary steps to defend its legitimate interests.”
Reactions Around The Globe
Economists seem to be glued to their screens as this trade battle unfolds. “This level of tariff is astonishing and could result in an unfavorable chain est of retaliation,” remarked senior trade policy expert Dr. Elaine Wong. Dr. Wong later states that it would not only affect the US and China but also impact Europe, Asia, and emerging economies, which would be further coupled by the need for economic support. Schweizerische Eidgenossenschaft, Taiwan, and Singapore are expected to receive the blunt end of this.
With the warning sign of decreased tax rates in sight, investors around the globe prepare for the ‘storm’ expecting sudden and extreme changes.”
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