Saver blast of the US- China economic warlike; Trump increased the Tariff on China

The trade war between US and China for more than a year now seems to be getting worse. It is not only a matter that affects China but also has an impact on international trade. The trade regime has reduced the volume of trade between China and United States, and the trade deficit remains unchanged.

Accordingly, the government has failed to minimize the trade scams that have been promised, and instead the global supply chain has broken down and the expected recovery in world history in 2019 is at an alarming rate. Is this a deliberate intention? How does this affect consumers? It is the consumers who are affected by this situation. America and Chinese consumers have become victims of this phenomenon. Attempts by importers to compensate tariffs from American consumers then they have to pay up-front duty tariffs indirectly. This is directly affecting low income families in America, and can cause inflation in the long run. According to the US research Institute, US consumers and producers were forced to pay 68.8 billion dollar per year due to the increase in tariffs in 2018. In 20th May 173 American companies (including NIKE, Adidas, and the huge companies in shoe manufacturing) have submitted an open letter to President Trump and have been asked to reconsider the reduction of duties imposed on China manufactured shoes. This has prompted the American consumer, the US companies and the entire American economy to be harmed. How does this affect producers? The other side embarrassed by this process is the producers. The Chines economy and manufacturing industry are very large, and it is directly influenced by the international economic system, making it difficult to put China away from the basic roots of the world economy. China’s trade war between US is not affected only by the Chinese producers. It is also adversely affecting American investors who have invested in a large-scale in China. They were revealed in a research carried out by Deutsche Bank, whereby the US obtained trade profits rather than China, through trade relations with China. Chinese and American producers, as well as those who use the intermediate inputs, are aggressive.

Moreover, the supply chain will cushion the tariff burden. The expansion of new technologies will be slower. It will be cause to reduce global productivity and well-being. What will happen to the world economy? According to the IMF report, when considering all US – China trade, it is expected that the global trade gap between these two countries will be reduced by 1/3. Half of them are due to the collapse of confidence in business and the markets. This economic dispute will affect not only China but other countries like European Union, Japan and South Korea who made trade deals with US. If this crisis is not solved in the industry itself, the business and the financial market will continue to shift.

Trade spreads will be adversely affected by spread and exchange rate, while investment and trade will slow. From the point of China, we cannot see a question of honesty. They are still at a level of discussion with US. A group of Chinese advisers still stand in Washington for this. China is ready to cooperate with countries including Sri Lanka in defence of trade, open economy and economic globalisation, and the promotion of the Aid, collective future and a common community.

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