Global stock markets tumbled on fears of a rising dispute between the United States and China. The DJIA or Dow Jones Industrial Average dipped after markets went south in Asia and Europe on worries about an increasing trade fight between Washington and Beijing. Hope exists, however, on both countries keeping a door ajar ti a future negotiated settlement. The clash mirrors tension between promises made by Trump to narrow the American trade deficit vis-a-vis China. The deficit was $375.2 billion in 2017. Regulators utilize access to the Chinese markets as a kind of leverage to force foreign companies to help the improvement or creation of technology.
Tariff on exports
The United States struck first, with plans to push tariffs amounting to $50 billion of goods imported from China. The Chinese lashed back, with planned tariffs on products imported from the US. The list of American exports include small aircraft and soybeans. Tariffs of both the countries would not be imposed right now. Washington has invited the public to put forward their opinion on the trade sanctions until May 11. A hearing on the issue will be done on May 15. Beijing for its part has set no specific date. The Asian country said that it waits for the next move to be made by President Donald J, Trump of the United States.
China's list of about 106 products include prominent American exports to China. Its sharp response mirrors the country's sensitivity to disputes concerning US complaints that it forced global companies to transfer technology.
The US establishment harbor no concerns about any kind of trade war. Wilbur Ross, the US Commerce Secretary in a media interview said that the tariffs mentioned by China make up only 0.3 percent of th US GDP. The high ranking official said that American punitive action over China could be done as the latter behaved in a predatory manner when it involved technology. Ross said that the dispute concerns a negligible part of both the economies. The Commerce Secretary said that bigger concerns exist over US intellectual property protections.
When queried on whether the US tariffs against the People's Republic of China were only a negotiating ploy, the top adviser to Trump, Lawrence Kudlow admitted that it is part of the process. He warned that the US stance should be taken seriously and added that both countries benefit through lower barriers.