Washington:
The trade stresses between the US and China have escalated considerably, whereby China imposes against-Tariffs on American imports in response to the rate of 10% of President Donald Trump on Chinese goods. This step has restored the trade war between the world's two largest economies, with the Chinese Ministry of Finance declaring that the American rates are violating the rules of the World Trade Organization.
China took out and said that Beijing “can be forced to take countermeasures” and emphasized that there is “no winner in a trade war”.
“We are firmly against this unjustified increase and we believe that this is contrary to the rules of the WTO (World Trade Organization),” said China's permanent representative of the UN ambassador FU Cong.
The retribution of China comprises a rate of 15% on American coal and liquid natural gas output, as well as a rate of 10% on crude oil, agricultural machinery and cars with large displacement. These rates will take effect on 10 February.
In a surprising step, China also started an antitrust study into Google that claim monopolistic practices. This probe is seen as a strategic response to the American rates, in which the Chinese state administration for market regulations states that Google is suspected of breaking the anti-monopolic law of the country.
The American rates, which were in force on Tuesday, are part of Mr Trump's efforts to put pressure on China to stop the flow of illegal drugs. However, China's rapid retribution has expressed concern about the possible consequences of this trade war. Mr Trump's description of the rates as an “opening salvo” in his commercial offensive against China has only added to the tensions.
“President Trump takes daring action to keep Mexico, Canada and China responsible for their promises to stop illegal immigration and stopping poisonous fentanyl and other drugs to flow into our country,” said the White House.
“In this issue, the US must approach this issue more from its own perspective. Look at the demand side of Fentanyl instead of shifting the debt to others. I don't think that will be good for the US itself,” Mr. Fu Cong replied.
Despite the escalating tensions, there is still hope for a resolution. Mr. Trump is expected to speak with Chinese President Xi Jinping in the coming days, and analysts are of the opinion that the two leaders may be able to negotiate a mutual affordable agreement, to alleviate trade tensions and further economic disruptions to prevent.
The impact of this trade war will be provided, in which both countries are confronted with potential economic losses. China's rates for American import will probably affect American companies and consumers, while American rates on Chinese goods can lead to higher prices and lower demand.