MUMBAI: Global markets can be expected to bleed further as US President Donald Trump is likely to announce fresh tariffs on about $200 billion worth of Chinese imports on Monday, media reports in the US over the weekend claimed. The Wall Street Journal reported that the tariffs could be set lower at around 10% as against 25% indicated earlier by the Trump administration.
The fresh tariffs are aimed at putting pressure on Beijing ahead of tough negotiations on its demand for technology transfer from US companies. China can be expected to retaliate in equal measure.
Global markets have been anticipating the punitive tariffs with trepidation since July when they were first proposed. Commodity prices are the ones to watch out for. Any fall in crude oil prices could help India. It can also be an opportunity for India to improve its exports to the US in textiles, garments, gems and jewellery.
Over 1,000 products could be impacted in the latest round of levies - from car seats for babies to seafood, bicycles, electronic goods, printed circuit boards, consumer goods like furniture, tyres, and commodities, including chemicals and plastics.
US media reported that the final details of the new tariff plan are still being worked out. White House spokesperson Lindsay Walters was quoted as having said, “the president has been clear that he and his administration will continue to take action to address China’s unfair trade practices.”
“China’s government has sent no signals that it intends to de-escalate trade tensions; it could respond just as it has thus far by applying more tariffs on US exports. Like the higher prices for imported goods, punishing US exporters will damage the innocent bystanders in Trump’s poorly justified trade war,” Peterson Institute for International Economics had said in a paper.
“Will this help US workers? Almost surely not. It will, instead, disrupt existing business arrangements, imposing a second China shock rather than fixing the first one. And will it bring China to the negotiating table? My problem here is that the U.S. doesn’t seem to have any coherent demands,” says Nobel Laureate Paul Krugman.