China recently announced that they would be placing tariff’s on $60 billion worth of US goods on 1 June in response to US president Donald Trumps recent $200 billion increase in tariff’s on Chinese goods.
The tariff’s Trump imposed last week were placed on consumer goods like backpacks, bamboo furniture and motorboats, while the most recent ones by China will be placing many goods at at a 25 percent tariff.
The intent behind the trade war that Trump began last year was with steel tariff’s is to protect US industries and make it more appealing to work with native businesses and not foreign ones. Over the past year, Trump and China have placed greater and greater tariff’s on goods traveling between both countries.
Part of the reasoning Trump gave for doing this, and why it continues, is because the US has a greater economic impact than China does, meaning China will not be able to gain as much from the tariff’s as the US would. Last August, US Secretary of Commerce Wilbur Ross said in an interview “But at the end of the day we have many more bullets than they do. They know it. We have a much stronger economy than they have. They know that, too.”
The impact of the trade has been mixed, with US farmers being hardest hit, despite efforts by the Trump administration to try and minimize the harm done to them. Estimates by the Congressional Research Service found that due to the tariff’s, the revenue generated from exports of US agricultural product was lowered by several billion dollars for 2019.
The Trump administration in 2018 provided $12 billion in aid to farmers dealing with the trade war, which helped soften the blow for many. Trump mentioned in a tweet on May 10 that he would be open to the idea of an additional $15 billion in aid to American farmers to help counter the affects of the trade war.