The talk between China and the U.S. to ease their trade tension is at risk amid fresh threats from the White House of tariffs on $200 billion of Chinese imports to be imposed this week, though the new tariffs will likely be set at 10% instead of the original figure of 25%.
Beijing is considering declining the offer of talks led by U.S. Treasury Secretary Steven Mnuchin, while the reporter also cited one Chinese official that the country would not negotiate “with a gun pointed to its head.”
The long-running trade war between the U.S. and China have fluctuated global stock markets, causing it to goes up and down in a blink of an eye. We can expect a rise or fall in the opening of trade day just by the news whether there is a talk to ease the tension or new tariff to be imposed.
The news regarding a potential trade talk between the U.S. and China may raises the stock market only for a short period, but from what we have seen since the first trade talk is that there is no agreement between these two countries at all. The U.S would not agree if the country is at loss from striking the deal, and threatens to impose the tariffs on Chinese goods, while China, who can do nothing, but to retaliate with the same imposing value.
This seems like an endless argument of the two powerful nations that should not have been dragged this long.
The intensify of this trade war might sink the emerging markets that have already been in grave danger, according to the head of the International Monetary Fund. The crises in Turkey and Argentina could also spread. Meanwhile, the IMF managing director Christine Lagarde said that If the world’s largest two economies continue on this course, it could have a “measurable impact on growth in China” and could “trigger vulnerabilities” in neighboring Asian economies whose supply chains are closely linked to Chinese industry.
There has been a report saying that a growing number of small Chinese firms are in the process of deciding whether to close up shop or move to another country with lower costs that is not part of the trade war.
There is no telling when will this trade war end, but it is starting to hurt us in a direct or indirect way. Maybe we will face the next financial crisis because of this.