Just one day after the conclusion of the 12th round of bilateral trade talks between the US and China, US president Donald Trump announced new tariffs on an additional US$300 billion worth of Chinese goods, starting September 1 with 10%. A 25% tariff rate has been already imposed on US$250 billion worth of Chinese goods. The application of further punitive tariff against China would mean that all Chinese goods exported to the US would effectively be subject to US protectionist customs duties.
Donald Trump and Xi Jinping meet during the G20 summit in Japan
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It creates, of cause, negative impacts on Chinese face and economy. China will soon retaliate properly. The unavoidable consequences would be more harmful for both sides and their disputes would be even harder to be solved in the near future. Their conflict further escalates and their mutual trust would be seriously undermined.
Both sides are always aware of the need to reach trade agreements the sooner the better. But both sides still continue to try to get the most out of this conflict and are unwilling to commit to each other. China wants a package comprising of separate agreements on all issues of concerns of the two parties while the US insists on separate agreements first and nail down China on its separate commitments to the US. This is the core disagreement between them.
Therefore, Mr. Trump's new tariff on Chinese goods is firstly something like another psycho warfare to deter and deliver a warning to China, keep this country under the US pressures and force China to kneel down. In this case, the new tariff imposition would not come into effect by September 1 or will soon be withdrawn. But it also would be a real strike if the trade talks between the US and China won't be resumed before September 1 as Mr. Trump has put himself at the "point of no return".
The most possible scenario will be that facing China's strong and effective threat, Mr. Trump is likely to back down and withdraw his recent decision in order to avoid Chinese retaliations and their bilateral trade talks will be resumed right in this August.
