The move by President Donald Trump to impose big tariffs on imports from China and the threats of retaliation by China set of new worries on Friday over higher prices for consumers in the U.S. and steep losses of sales for businesses in the U.S.
Trump this week said he is going to place a tariffs of 25% on between $50 billion and $60 billion in imports from China into the U.S., including information, aerospace, and communications technology, and machinery.
The goal of his move is to counter the cyber and intellectual property threat by the Chinese of U.S. technology. At the same time it is attempting to push back against demands from China for technology transfers from companies in the U.S. to be allowed new access to markets in China.
The government of China said in turn it would hit shipments of U.S. goods to China with tariffs totaling $3 billion, affecting goods such aluminum pipes, steel, pork and wine.
However, those tariffs appear to be a response to the sweeping tariffs of 25% for imported steel as well as 10% for aluminum that were announced earlier this month, said one industry analysts. The analyst expects China will impose more damaging tariffs on goods from the U.S. comparable to the Trump tariffs on $60 billion announced earlier in the week.
The analyst estimates that the conflict could cut into economic growth by close to two-tenths of one percent in 2018, and a tenth in 2019. The economy has projected to grow during that period between 2.5% and 3%.
U.S officials said that the most recent tariffs will be placed in such a way that they minimize the impact felt by the consumer.
Officials in the U.S. said tariffs will be placed in a particular was as to minimalize impact they have on the consumer. They could also be lessened, as Trump said he would seek the opinions of business group prior to finalizing the proposal.
However, a member of an international trade group said there is no way of imposing $50 billion worth of tariffs on imports from China without leaving a negative impact on consumers in the U.S. Without a doubt said the analyst the American consumer will be charged through paying more at the checkout counter for items they shop for each day.
Another analyst said that a trade war would erase what benefits the new tax cuts made and result in prices that are higher for a wind range of products consumers use each day.