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US-China trade war intensifies

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US President Donald Trump's Administration has imposed tariffs against additional goods worth $16bn (£12.4bn) imported from China, which include tractors, motorcycles, fridges and ariels.

The latest tariffs introduced on Thursday follow on from those that have already been applied on Chinese imports including washing machines, solar panels, robotics, cars and machinery.

There is also a threat of further tariffs being introduced on $200 billion of Chinese goods which includes a proposed 25% levy against bikes, cots and medicines, which could take place as early as next month.

The charges have been introduced as President Trumps administration claim the imports are cheaper in comparison to US goods thanks to practices by the Chinese, such as state subsidies. In support of an attempt to ‘Make America Great Again’ the introduction of tariffs pushes up the prices of the Chinese imports and, it is suggest, should help in a bid to get US citizens to purchase more ‘made in America’ items.

However, US companies who, for example, use components imported from China to manufacture their goods, have also expressed fears that additional tariffs will push up prices of their goods also. Whilst it is also expected that the China-Us trade war could have a knock on effect to other South East Asia countries which supply goods for final assembly to China.

In response to the latest action by the US, China subsequently applied additional tariffs to US goods including levies against coal, copper scrap and medical equipment.

It is not just goods from China for which additional levies have been applied by the US. Import duties on steel and aluminium from Canada, Mexico and the EU have also been subject to additional charges in recent months. These countries have in turn also imposed their own additional taxes against imports from the US which include items such as bourbon, Harley Davidson motorcycles, peanut butter and orange juice.

Whilst short-term, there does not to appear to have been too much of an impact from the ongoing trade spats, the International Monetary Fund have suggested a continuation of a trade war could affect global growth by 0.5% by 2020.