China imposes taxes on US goods worth USD 60 billion; global markets

Beijing/Washington: China has fuelled the trade war further by imposing taxes on US goods worth $60 billion. Coming close on the heels of the Chinese announcement, global stock market dipped, and it’s currency Yuan hit a four-month low. Reacting ferociously to Chinese taxes, President Donald Trump ranted that he would not let the United States become a ‘Piggy Bank’ to any other country. At the same time, he also indicated that the process of slapping taxes on the entire imports from China to the US has already begun.

Last week, a Chinese delegation had visited the United States to discuss trade. However, despite two days of negotiations, the US-China talks failed. While the discussions were underway, President Trump created a stir by threatening China of hiking tariffs. The tariffs were implemented even before the Chinese delegation returned their homeland. Furthermore, President Trump had once again targeted China, while China was voicing reactions over it. He had threatened China to sign the trade agreement then, or it would face dire consequences after 2020.

Because of the successive jolts delivered by President Trump, China was forced to take prompt action. China, on Monday night, announced increased tariffs on US goods worth $60 billion. Accordingly, tariffs will be implemented on more than 5,000 products in the list from June 1. China clarified that these taxes had been increased from 5% to 25%. A communication released by China said that an additional tax of 25% would be imposed on nearly 2,500 US products, including natural gas, petrochemicals and frozen vegetables.

The Chinese announcement had drawn a strong reaction from the global stock markets. Both the leading US Stock indices ‘Dow Jones’ and ‘S & P’ have dropped by 600 and 500 points respectively. The US sources said that this is the biggest crash of the year. Following the US, markets in China, Japan, Singapore, Australia, Hongkong and also Europe and Asia too crashed. The crash recorded, varies from 0.2% to 3%. The analysts have expressed fears that the trend could likely continue for the next few days.

After the stock markets, deviations were also observed in the currency and the bullion markets. The rates of Yuan fell to its weakest against the Dollar in the currency market, hitting the lowest for 2019. This level is said to be a warning bell for Yuan. On the contrary, the share market crash scaled up the gold price in the bullion market, crossing USD 1,300 per ounce in the international market.

Meanwhile, US President Trump has justified the US actions while sharply disapproving the tariffs levelled by China. The tariffs imposed by the United States have brought respite to the steel industry as also to the farmers in the country, and Trump assured to keep his stance brave even in the future. At the same time, he said that although he shares good relations with Chinese President Xi Jinping, the United States would never budge on the issue of trade deficit.