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US-China Trade War Has Started

The much discussed trade war between United States and China has started recently.

It all began with the strict protectionist policy adopted by the US President Trump's Administration, whose target has been China as the US main trading competitor. By setting a 25% customs duty on imported goods worth more than $ 50 billion annually, Trump justified his move by "stealing the latest US technology by Chinese authorities."

In fact, Trump carries out promises made during his election campaign, the core of which is the ideology of the American interests. Following the election, the same taxation policy was applied to American companies outside the United States, with the goal of concentrating their activities in the homeland.

Meanwhile, one of the most vivid obstacles to the full implementation of US interest supremacy is the expensive domestic production, as a result of which the imported goods are more competitive. In this context, China, as the largest trade partner, poses a major threat. That is to say, it is necessary to create a situation where Chinese products will not appear in the American market or they will be non-competitive.

 The implementation of the first is almost impossible, taking into account a number of commercial conventions and responsibilities that the United States has. As for the low price issue, which is the main cause of Chinese goods competitiveness, this decision will be a very effective tool.

The high customs duties on imports of Chinese goods will harm both countries, as the deficit of Chinese goods in the American market will be supplemented with local goods, which will be much more expensive. That is, a high level of inflation will be expected in the country. On the other hand, China, in turn, has responded to the import duties on a number of American products.

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