China and the United States again in trade wars

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The US is going to impose duties of 25% on imports from China of $200 billion after the initial installation at a level of 10%. This is an attempt of pressure on China to obtain trade concessions.
A trade war between the US and China is still developing positively, beyond even the harsh principle of “an eye for an eye.” For an initial introduction, on 6 July, a 25 percent US tariff on imports from China at $34 billion and $16 billion Beijing responded with a mirror.
Set tariffs on American goods by $50 billion If the situation stopped on the data volumes, the damage to the Chinese economy would be quite limited, though noticeable. $50 billion is 2.2% of export of China. Fees can reduce GDP growth by 0.1-0.2 percent. p., according to the people’s Bank of China (recall that in 2017 this figure rose to 6.9%).
But Washington took the return move to Beijing as a sign of his inability to change their approach to the American demand. Now we are talking about additional import tariffs of 25% on goods at $200 billion, this Amount is not accidental. It is on this volume D. trump demanded that China increase imports from the US for leveling trade balance between the countries. Moreover, China was willing to discuss a compromise, although the amount is too large to implement. But now in case of further intransigence of China and its additional retaliatory measures, the United States threatened to impose duties on imports by $300 billion.
In this case, the total amount of the fabulous $550 billion Is more than the total imports from China to the United States in 2017 to $506 billion While in the trade war may be involved and the state of the European Union, Canada, Mexico… In this scenario and their mutual protective duties the total volume of world trade can fall by 10%, according to the world Bank. So it is not reduced even during the global crisis of 2008-2009, the cost of imports, the decline in the purchasing power of consumers will reduce demand and investment. Global GDP will suffer a loss of 0.5% for two years, according to Bloomberg Economics calculations.
In this case, and China will lose 0.5% of its GDP by 2020, it is Noteworthy that the United States then will lose even more – 0.8% of GDP, as counter-tariffs against US are with many countries.
Given this, we can hardly consider this a protectionist strategy D. trump promising. “The hatchet”, thrown them, will turn into a boomerang that will come back and hit the thrower….
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Mark Goykhman,
Senior analyst,
GK Teletrade