US-China Trade War finally sees progress; although maybe not the one China would want to comprehend.
The trade war with China has officially brought results for the United States. Their demands will see fruition on and from August 23rd after the United States Trade Representative’s office revealed on Tuesday that the US will begin collecting tariffs on another $16 billion of Chinese goods.
The final tariff list was released which showed 279 import product lines to be targeted. The original one, proposed on 15th June, saw only 5 product lines getting scrapped but one of the largest categories of semiconductors still remain. This latest development brings the total to $50 billion in goods that face a 25 percent tariff. Although China has promised payback, the US imports a comparatively lesser value of goods from China that is the case vice versa. However, this chain of events doesn’t guarantee the States a clean bill of health. About a fifth of US businesses including 30 percent of manufacturers are reviewing their capital spending plan, as revealed in a study by the Federal Reserve Bank of Atlanta.
Another study showed that businesses were primarily reviewing their plans but only a few were making decisions to cancel or postpone investments. David Altig, the Director of Atlanta Fed Research wrote on a blog posted Tuesday on the bank’s website says, “These findings suggest that tariff worries have had only a small negative effect on U.S. business investment to date. Still, there are sound reasons for concern.”Altig and his co-authors added,“Trade policy tensions between the United States and China have only escalated since our survey went to the field. The negative effects of tariff worries on U.S. business investment could easily grow.”The Federal Reserve has kept a positive outlook towards growth in the US; however, a number of officials which include Atlanta Fed President Raphael Bostic have reservations about this trade battle and have issued warnings that it could be a downside risk for the economy.
Bostic also added that businesses are extremely concerned about the prospects of this trade war. All in all, it looks like China isn’t the only one who needs to keep an eye on its back.
*Neha Hardikar is a Research Intern at The Kootneeti