Dear MEL Topic Readers,
Why Beijing is not backing down on tariffs
China was the second largest exporter to the US after Mexico last year, amounting to over 400 billion. As of April 11, the US has announced that it will impose 145% reciprocal tariffs on most goods from China, including metals, cars, computers, and smartphones, in an attempt to negotiate deals that would reduce its trade deficit. However, China has hit back at the US with retaliatory tariffs up to 125%, a 50% jump from the 84% tariffs announced just a few days earlier. China imports oilseeds, grains, oil and gas, medicines, chemicals, and semiconductors from the US. Why have the two superpowers engaged in such tit-for-tat tariff increases that have tumbled the financial markets around the world? Exporters, importers, manufacturers, retailers, and consumers of these countries are all going to be physically and financially affected sooner or later unless the two governments sit at the negotiation table or drop their guns. However, China’s stance on the US’s reciprocal tariffs has been very rigid so far. How come they can stand it? In the meantime, the Trump administration suddenly announced today that smartphones, computers, and other electronic devices and components, including semiconductors, solar cells, and memory cards, are exempted from the tariffs retroactively to April 5.
Read the article and learn about the latest trade tension between the two superpowers.
https://www.bbc.com/news/articles/cjew7y4j724o
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