What You Need To Know About The US-China Trade Clash And How It May Affect You
Trade relations have been heating up between the US and China and tariffs continue to rise.
President Trump of the United States and President Xi of China are not in the best of relations right now. With the newest waves of tariffs levied against both countries, the Dow Jones, the primary stock market indicator in the US, has fallen 617 points, about 2.4% of its total value, the largest one day drop since January 3 of this year, which happened over concerns with funding for Trump's wall.
Before Trump's election, he vowed to target China for its harmful trade practices and suspicious corporate actions, specifically foreign direct investment, through which the Chinese forced any foreign businesses to partner and associate with Chinese organizations if they wanted to expand into China. Trump and many others see this as a threat to the intellectual property of many American businesses and a threat to proper business practices worldwide.
Since the start of 2018, Trump has placed tariffs on Chinese goods as a result of their allegedly unfair actions, and as a result, China has retaliated with their own tariffs against US imports. This has only snowballed into more issues, with the latest tariffs being of huge magnitude, with US imposing tariffs of 25%, and in return, China imposing new duties on US goods that could reach 25%.
Unfortunately, these high tensions among both powerful countries have frightened investors worldwide, especially in the US markets. Companies like Apple have seen huge hits to their stocks, falling almost 6% on Monday, all concerns regarding the trade war. Apple has repeatedly taken hits over the last two years because of the China trade war, and have suffered much more compared to many other companies. Many investors are concerned about the future of trade among the two countries and what it could mean for the world economy.
While Trump's tariffs did have the US's best interest in mind, this may be getting out of hand. In my opinion, this "trade war" is starting to get out of hand if it has not already. The economy has started to suffer as a result of retaliation from China and repeated increasing of tariffs on both sides.
In terms of the effect on the average citizen such as you, the domestic economy could potentially see unemployment as a result of slowed economic growth. Prices of certain goods may rise because of the tariffs on goods imported from China. The country may even slip into a recession if the economy starts to slip as a result of these tension. But that is all for the future to decide.
