Trade Battle Went Crazy as China Retaliates US’ High Levies

Advisor April 5, 2018

China has recently made public its decision to place new levies on American 106 goods such as soy and vehicles, although the date when this new policy will commence is yet to be announced. The country’s Commerce ministry in Beijing stated that the charges are meant to get US items worth $50 billion every year.

Part of the stipulated tariffs of 25% placed on shipped goods from the U.S are alcoholic drinks like whiskey, vehicles, and soybeans. This action was taken barely one day after the US president, Donald Trump released the names of Chinese products as one of its plans to sanction unjust trade systems.

Last Wednesday, China declared increment in the levies it wants to place on 106 goods from the U.S. This action looks like a response to US’ $50 billion tax on China’s products, and economic observers worldwide are worried that this step may possibly increase unhealthy reprisals through the use of trade weapons between China and America, the two largest economically buoyant countries in the world.

US launched its own trade weapon against China recently but in a bid to not surrender, the Asian country also responded

The industries that are directly affected by the US’ president’s approved levies are producers of materials used in producing communication technology; aerospace; robotics and IT.

This battle of economic supremacy going on between China and the US is shaking shareholders to their marrows and has intensified unease in the market sphere that seems this misunderstanding may lead to a fierce trade collision very soon.

Goldman Sachs’ head of strategy and equity worldwide, Peter Oppenheimer, bore his mind on the ongoing raging battle. The international markets are presently witnessing an official degenerated trade collision. Oppenheimer replied that he feels the situation is no doubt a war through trade. He went on say that the fear emanating from the marketplace is hinged on the possibility that the battle may develop into something that will spread throughout the markets.

The steps taken by China to retaliate US decision on import levies have affected American stocks in a negative way, as it went on downward slope last Wednesday. On average, Dow Jones company swallowed over 451 points, while Caterpillar and Boeing took the front row on every stock at the lower index.

In the meantime, the released declaration that came out last Wednesday also made stocks in the European markets to stretch its losses, as Stoxx 600, the European company, smashed a drop of 0.9% not long after the information broke out. According to an international strategist working for Allianz Global Investors, Neil Dwane, China, through Beijing, is extremely eager to express its attributes as a country that will never tolerate oppression.

He went further to say that the Asian country will place itself strategically in a position that might allow it to react to what he (Dwane) referred to as the United States’ *aggression”, but China will not want to be seen as a party to the predicament.

Furthermore, the official currency for China, yuan, also went through its worst value drop in one day against the American currency in close to 14 days, an aftermath of the proposed move. The rate of devaluation dropped 0.5% and struck 6.3016 to a dollar.

The Capital of China, Beijing’s Headquarters.

US Products Affected by the New Tariffs

Some of the items that China is placing the new levies on are listed below;

The yellow-colored soybeans;
The black-colored soybean;
The Corn-flour;
Grubby cotton;
The Sorghum;
Concentrated or brewed residue and draff;
Alternative durum wheat;
Alternative wheat;
Combined wheat;
Chilled complete and half fresh head of beef;
Chilled fresh beef that has bones;
Chilled fresh beef without bones;
Chilled beef that has bones;
Chilled beef without bones
Chilled meat without bones
Alternative chilled chops of beef
All brands of Whisky;
Dry Cranberries;
Chilled and juicy orange drinks;
Juicy orange drinks that are chilled.
SUVs that have capacity seepage between 2/5L-3L;
Alternative cars powered with a kindled interchange piston inner ignition engine that is compatible with external electrical plugs when charging is needed;
Cylinders with supplanting capacity above 2500ml, however not above 3000ml in the cases of 4 wheeled SUV drives;
Moderately or completely damped stems of tobacco;
The residue of tobacco;
Cigars with tobacco;
Alternative tobacco produced for the purpose of smoking.