As of yesterday, the most recently announced round of tariffs are in effect. The United States chose to levy an additional 5% tariff on $125 billion worth of Chinese imports (on top of the 10% previously threatened, for a total of 15% currently). The items affected include TV, smart watches, and shoes.
Meanwhile, China also hit back with tariffs of 5% on American goods in the amount of $75 billion, mostly targeting US oil products. In addition, China plans to tax even more US goods from December 15, should the trade dispute not be resolved by then.
US businesses are beginning to voice their disapproval of Trump’s tariff plan. Despite what the President believes, the cost for the tariffs is not paid by China. The American companies who choose to import goods and materials from China are the ones who have to pay the tariff to the US government. In turn, this will gradually lead to an increase in consumer prices as suppliers try to make up for the rising costs of production. An increase in unemployment is also quite likely since US companies will try to cut costs by laying off employees.
China’s state media has continued to criticize Trump’s approach. They stated that the United States is behaving like a bully instead of acting responsibly.
Despite all of this, negotiating teams from the US and China are expected to meet in September and resume talks about a trade agreement.
