New taxes? How does the trade war change between China and United States

Donald Trump introduced new taxes on 6,000 products from China, a measure that is beginning to be answered by the Asian country

New taxes? How does the trade war change between China and United States

A few days ago the BBC reported that Donald Trump announced that from September 24 the United States would begin to apply taxes of 10% to 6,000 Chinese products, which is equivalent to approximately USD $ 200,000 million. The BBC report points out that this means that almost half of the products that China sells to the United States are now subject to tariffs.

Leer en español: EE.UU. vs China: ¿Cómo cambia la guerra comercial con los nuevos aranceles?

In addition to that, according to The Guardian, Trump threatened to apply additional tariffs to all imports from China in case this country responded with retaliation. Despite this, the response of the Asian country did not delay in appearing. The Guardian also reports that China announced that it will apply new tariffs to US products, such as coffee and aircraft, equivalent to USD $ 60,000 million.

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The lack of equity in China's response is clear, and the reason for this is that, as seen in a report from the US Census Bureau, the Asian country has imported from the US for more than USD $ 500,000 million, while exports are only a little less than USD $ 130,000 million. This means that, at this moment, China depends more economically on the United States than the United States of them.

China resorted to measures beyond tariffs

However, the aforementioned article by The Guardian notes that, according to some analysts, China can take other measures to respond to US financial attacks. These could include the devaluation of their own currency so that tariffs do not affect them as much or the intensification of Chinese financial practices that Trump has pointed out as "unfair", such as the obligation to transfer the intellectual properties of American companies when they operate in China.

This last scenario could show companies such as Nike, General Electric and Apple, which have operations in the Asian country, receiving harsh and invasive security and health checks by the Chinese government or even the cancellation of contracts signed with US companies.

The effects will also spread to Latin America

This commercial war also affects Latin America. Forbes reports that one of the Chinese products that received the tariffs on September 24 correspond to the textile market. Taking this into account, Raúl García Tapia, director of Fashion Outlet México, commented that the commercial war will make the United States turn to more stable textile markets such as Mexico.

"The commercial war does have an effect on Mexico. (...) The Mexican market is more stable because, although there were negotiations with the Free Trade Agreement, we already know what the scenario is, that there will be no increase in tariffs (in the industry) or drastic changes in the rules of origin ", said García Tapia.

However, not everything is good for the region. For its part, CNN highlighted the fact that the financial uncertainty caused by the commercial war has motivated investors to invest in safer markets, such as the United States, leaving out emerging Latin American projects which could mean a risk that might not be worth It's worth taking at the moment.

This has caused the rise of the dollar and the devaluation of Latin American currencies. However, it could be temporary according to Jorge Amato, director of Investment Strategy for Latin America at Citi Private Bank. According to him, the impact of the situation between the United States and China in the region will be very limited, emphasized in the inflation rates and the monetary policies of the Latin American countries.


LatinAmerican Post | Sofía Carreño

Translated from: 'EEUU vs China: ¿Cómo cambia la guerra comercial con la introducción de los últimos aranceles?'

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