Global Macro Service > Research Briefings > China

US-China trade tariffs – bad and good news

Immediately after the US imposed 25% tariffs on US$34 billion of imports from China today, China retaliated in kind. While the impact of these moves will be modest, the big worry is on escalating trade tensions. Indeed, added uncertainty is already dampening business confidence and delaying investment internationally. A statement by China’s Ministry of Commerce strongly criticised the US move and vowed retaliation, but otherwise indicated restraint and continued commitment to reform and globalisation. In our view, such restraint, as part of a strategy to assume global leadership, may limit the global economic damage of a trade war between the US and China.

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