The ongoing negotiations between the U.S. and China has resulted in a furthering on trade wars.
Today U.S. President Donald Trump declared he will be imposing tariffs and effecting $34 billion worth in Chinese goods. This declaration is already taking effect through the value of soy raising 2 percent, since China is the world’s largest soy importers. China will also impose tariffs on hundreds of U.S. products in retaliation.
The U.S. shipped more soybeans than usual in May as markets we’re expecting for the trade war. Economists project that soybean exports will sharply drop in July, with 90 million acres of soybeans grown in the U.S. the new tariffs will cost American farmers approximately $3.5 billion.
President Trump declared in June that the U.S. could levy approximately $450 billion of tariffs on imported Chinese goods, with Trump focusing on sparing consumer products that are high in-demand. Just last year the U.S. imported only $5 billion worth of Chinese goods. These trade tariffs are in effort to make up for the trade deficit, though many in President’s cabinet reinforces that the deficit doesn’t matter considering China imports less from the U.S. of $130 billion worth of goods.
Limiting trade between the U.S. and China can also effect not only the import market, but can limit U.S. companies operations that are based out of China. This can also effect the future market by limiting U.S. companies attempting to operate in China. the former economic adviser to the Trump administration, Gary Cohn, predicted in June that a trade war has the potential to undo the benefits of the tax cuts for companies and could increase import tax on items.
The cost of this trade war will be paid by the consumers as the import taxes rise. There are tariffs already in place for steel and aluminium products around the globe, even with allied countries. Check out the video above for more on the trade war.