The midnight deadline for the U.S. and China to create a new trade agreement has come and gone. While the trade talks continue, they still didn’t stop new increased tariffs from hitting. What was once a 10% tariff on $200 billion worth of Chinese exports magically turned into a 25% tax.
China isn’t taking this situation lightly. They’ve already vowed to retaliate if a new deal isn’t struck soon. As you can imagine, these tariffs are hurting the Chinese economy. President Trump feels as if China has a major advantage over the U.S. They have what he calls a “very big imbalance” where they make a lot of money off of us and we make very little in return.
President Trump made his comments in several tweets:
“Talks with China continue in a very congenial manner – there is absolutely no need to rush – as Tariffs are NOW being paid to the United States by China of 25% on 250 Billion Dollars’ worth of goods & products. These massive payments go directly to the Treasury of the U.S. The process has begun to place additional Tariffs at 25% on the remaining 325 Billion Dollars. The U.S. only sells China approximately 100 Billion Dollars of goods & products, a very big imbalance.”
How this Impacts Us
While Trump says he’s in “no rush” to get a new trade deal done, it doesn’t just hurt the Chinese economy. The U.S. economy is being threatened as well. This is especially true if China keeps its promise to retaliate in the same manner. That means many products we buy every single day are about to become much more expensive.
“China deeply regrets that it will have to take necessary countermeasures,” China’s Commerce Ministry said in a statement. Still, we might not see the weight of this change for a few more weeks. It will take about three weeks for the products currently sitting on Chinese freighters to make it over this way. It won’t be an immediate change.
What kind of impact can we expect? The largest bulk of the tariffs are on electronics, machinery, and car parts. They also extend into everyday products, like toilet paper, orange juice, clothing, iPhones, computers, and more. The president remains optimistic that this will be a good thing for the country and our economy.
“Tariffs will make our Country MUCH STRONGER, not weaker. Just sit back and watch! In the meantime, China should not renegotiate deals with the U.S. at the last minute. This is not the Obama Administration, or the Administration of Sleepy Joe, who let China get away with ‘murder!'” he tweeted.
