Trade War Erupts as China Retaliates Against Trump's Tariffs

China Retaliates Against Trump's Tariffs

President Donald Trump's recent tariffs on the U.S.'s three largest trading partners have sparked a trade war, with China responding with retaliatory tariffs of its own. While Trump has agreed to suspend tariffs on Mexico and Canada for 30 days, China has imposed tariffs on a range of U.S. goods, including coal, liquefied natural gas, oil, agricultural equipment, and large-engine cars.

China's tariffs are carefully calculated and may not have a significant impact on the U.S. economy yet. However, experts warn that this could be just the beginning of a larger trade war. China's tariffs are largely symbolic, affecting only a small percentage of U.S. exports to China. Additionally, the tariffs on liquefied natural gas and oil may not have a major effect, as the U.S. only exports a small amount of these products to China.

However, the tariffs could have a larger impact on other industries. The tariffs on five critical minerals, essential to the U.S. national security and economy, could disrupt the production of smartphones, electric vehicles, and solar panels. Additionally, the tariffs on cellphones, laptops, and tablets are expected to increase prices for consumers.

The tit-for-tat tariffs are likely to harm both countries. An analysis by economists at the Peterson Institute for International Economics predicts that both countries' GDPs would suffer if the tariffs remain in place. Inflation would also increase in both nations.

Trump is planning to talk with Chinese President Xi Jinping in the coming days. It remains to be seen whether they can reach an agreement to end the trade war.