The United States can become one of the world’s most protectionist countries if Donald Trump’s new tariff threats are imposed.
Trump said on Twitter on Sunday that the current tariff of 10% on Chinese goods worth 200 billion dollars will rise to 25% on Friday. He also threatened to impose 25 percent of taxes on an additional $325 billion of Chinese goods “shortly.” The US fees are already higher than those of most developed economies, which will rise to higher levels than many emerging market countries. Where tariffs are becoming more common.
“If the U.S. follows through on the latest trade war threats it will raise the overall US tariff level to 7.5%, which is higher than in many emerging markets, said Torsten Slok, the chief economist of Deutsche Bank, in an e-mail on Monday.
The tariffs imposed by Trump have shaken markets, which recently hit record highs thanks to optimism in the trade deal and strong corporate earnings. Companies with high exposure to China’s revenue such as semiconductors led the losses on Monday.
Some Wall Street analysts are still positive about a trade deal, saying the Trump threat is just a negotiating tactic.
Trade negotiations between Washington and Beijing are still due to resume on Wednesday, but the vice premier is likely to cancel the trip he was planning in the final round of talks.