Tariff battle between USA and China resumed earlier in May this year after trade talks with the US proved to be futile. Punitive tariffs on $200 billion of Chinese good were more than doubled to 25% by Trump and other imports from China are on the waiting to the list. In retaliation, China announced it will increase tariff on $60 billion in American products on June 1 giving a small window for a possible resolution that is yet to materialize.
Condoms, wine, perfumes are among American products that will be greatly affected by the increase in Chinese tariffs that highlighted the war between the two countries after Trump blacklisted Huawei.
The US tariff is already taking a toll on Chinese Manufacturing Industry, which over contracted this month if official reports are anything to go by. Angry officials have pointed fingers at the US accusing them of naked economic terrorism, insisting that if there are any negotiations to be held, the US must show sincerity.
Other products subjected to China tariffs of 25 percent include Beauty products, Sports equipment, Pianos, and string instruments, diamonds, industrial robots, tires, fabric, wood, and toys.
Its getting tougher for China as Trump’s administration has issued orders to curtail Huawei’s access to American components it needs for its equipment, though a 90-day reprieve was issued. According to Chinese state media, Beijing could hit back by stopping exports of rare earth to the United States, cutting off key materials for US Tech Industry, used to make smartphones, televisions, military equipment among others.
According to the US Geological Survey, Chinese mines accounted for 71 percent of the world’s rare earth production in 2018, down from 80 percent in 2017 and 95 percent a decade ago. Cutting off exports to the US could give Beijing leverage in trade talks as China supplies 80 percent of the rare earths imported by the United States, but this decision could provoke a global search for an alternative of the product.