What are the risks of the American -Chinese trade war, and can the conflict be avoided?

Fast fire shot from definitions Between the United States. and China In recent days, global fears of a new trade war have increased between the two largest economies in the world. However, experts believe that the battle is likely to escalate, they also say that early skirmishes offer hope for trade and other major issues that can exceed a greater conflict.

After the additional Trump administration tax entered 10 % on Chinese imports on Tuesday, China announced a 15 % tariff On American coal and natural texture, along with a 10 % tariff on crude oil, agricultural machines and some cars, is scheduled to start on February 10. China has also set borders on the exports of biological metals used in high -tech products; Opening the anti -monopoly probe in Google; Two American companies were placed on the list of “unreliable entities” – the PVH group, which owns Calvin Klein, Tommy Hilfiger, and Illumina, a biotechnology company with offices in China.

However, the United States chose to strike China relatively modest tariffs, instead of drawing up to 60 %, as President Trump had previously threatened. For its part, Beijing also pulled punches by targeting the least vital American sectors, leaving the door open to the sides to reach a deal.

“I think (Mr. Trump) has retracted a larger Chinese tariff because it has become clear to him that he would eliminate any possibility to negotiate.” For strategic and international studies, tell CBS Moneywatch. “This will be very expensive, and they consider it a basis for an economic war. So I think he went with a number that does not prevent future negotiations and will continue to send a signal, so it ended with a 10 %.”

Currently, Wall Street investors are also taking new trade sanctions for countries in a step, with betting that neither Mr. Trump or Chinese President Xi Jinping is eager to start a mutual destroyed economic war.

“Everything is a speech at the present time. This is the stage of negotiation,” said Bill Dinidi, a financial strategic expert at the Investment Bank, Raymond James. “It seems like two brothers who started talking, and they will start throwing punches, but they don’t want to harm each other. It is not good for anyone if he goes out of control.”

Julian Evans Brotshard, head of China’s economy at Capital Economics, told investors in a report that Chinese reprisals were clearly calibrated to try to send a message to the United States (and the local public) without much damage. ”

Even such efforts to avoid a complete trade war can stumble, stimulating Mr. Trump to follow a more difficult line against China, which has long claimed that he used a set of unfair practices that liberate American companies and workers.

“Edge of the cliff”

Rinsh said he expected Mr. Trump and something discussion of a deal that may lead to the cancellation of the customs tariff, or at least waiting. “These are all influence moves,” Rinsh said. “The purpose of this is to force negotiation on everything he wants (Mr. Trump) negotiating, and he is good at the edge of the abyss.

On February 1, Mr. Trump announced 25 % of the definitions of imports from Canada and Mexico. But the United States quickly Stop these duties for one month After the leaders of both countries said they would increase their efforts to reduce the flow of illegal drugs and migrants to the United States

Trump wrote on the social truth, Mexican President Claudia Xinbum, “she agreed to provide 10,000 Mexican soldiers on the borders separating Mexico and the United States.” Meanwhile, Canadian Prime Minister Justin Trudeau said that Canada will invest 1.3 billion dollars in better to protect its southern borders.

“Trudo and Shinbum have discovered that this is the way to play it. If Trump is given outside the slope where he can say,” well, you won, he will take it, and this is what happened, “Rinsh said.

Whether these dynamics will eventually work with China, and whether something is ready to indulge, they are still not sure. After all, during the first period of Mr. Trump, it was repeatedly imposed on the definitions of China, which led to revenge every time. Some experts believe that Trump officials will have to pay more hard to get a kind of changes that are likely to satisfy Mr. Trump.

“This represents the fifth consecutive time that Beijing has taken into account the customs tariff, rather than required reforms. The first four times occurred during the first period of Trump and also obtained zero results. At some point, President Trump needs to know that the customs tariff will not get what he wants from China. ”

Risks for consumers

The risks of the rising trade war between the United States and China are great, including high inflation.

“If we continue to go down in this way, it may be very harmful to the American consumer because he is the consumer who pays these definitions, as the costs that are not easily absorbed by industries that have already narrow margins,” Dinidi said.

Unless the two countries find a breakthrough, “Americans can expect a lot to pay for their technological goods, as well as their clothes and other things.”

In contrast, the US prices are unlikely to rise in the short term even if the conflict continues, as economists note. On the one hand, the increasing definitions may slow economic growth, which leads to inflation as spending on consumers and companies. Reinsch also notes that many American companies importing goods from China have been prepared for high costs by building their stocks proactively.

One of the fields in which American consumers can feel an immediate effect-their purchases of cheap clothes from Chinese rapid retailers in fast and TEMU fast fashion. The new American definitions in China removes the exemption of beams with a value of less than $ 800, which means that low -value goods are now subject to fees.

The United States receives approximately one billion shipments annually.

“If you are Timo and Shane, it is likely to reach reasons. These costs will be passed to shoppers. In addition, Mr. Trump has asked to protect customs and protect borders to inspect the low value packages to be examined for fentanel, which can create shipping delays .

The implementation of the tariff by 10 % on China, along with the 25 % imports on imports from Canada and Mexico that are now suspended, would cost the model American family that exceeds $ 1,200 annually, according to the Peterson Institute for International Economy.