Both the European and American stock markets have fallen for the second day running in the wake of harsh tariffs announced by the United States this Friday.
The decision, announced through a tweet from US President Trump, declared an imposition of tariffs worth $300bn on Chinese imports and would effectively tax all imports coming to the United States from China.
All three main US indexes closed at the end of this week down, with significant drops in both the European and Asian stock markets being reported as early as Wednesday night.
Under this controversial new rule, a 10% tariff would be applied to all Chinese goods coming into the United States, including everything from smartphones and clothing to minerals and agriculture.
The President called this a ‘short-term measure’ but has threatened to increase the tariff to a further 25%.
This comes on top of the 25% tariff that is currently placed on $250bn worth of products being taxed by the Trump administration.
This comes after a week of bilateral talks between the two countries which representatives called ‘constructive’ and has come as a surprise to many involved in this delicate process.
Foreign offices in Washington and Beijing have seen the President’s social media announcement as unexpected, especially as further talks were already scheduled to continue in September.
A spokesperson for Beijing suggested that China would have no option but to retaliate if the President continued his volatile system of tariffs and could force the US to pay more for rare materials, including rare earth minerals vital for some aspects of manufacturing in the USA.
Who Is Hurt?
Researchers are also warning that these tariffs will hurt the American manufacturer and consumer harder than it will China.
Many have condemned the President’s lack of knowledge concerning trade and the US Chamber of Commerce has today announced that this move could ‘undermine an otherwise strong economy’ by placing the country in an unnecessary trade war.
The US and China are the two largest economies in the world and their ongoing dispute over trade has caused mounting uncertainty for the global economy and worries of an all-out trade war.