Trade Talks Show Positive Momentum, Though Tariffs Continue to Cast a Shadow Appears that trade negotiations between the US and China are set to continue after an unexpected twist in the recent events. Major government officials from either country took a significant call on Thursday night, showing a common desire for the negotiations to be extended despite the signals of discord from the past.
Without a doubt, both nations found a temporary solution to the problem of tariffs,. In fact, there was a possibility that the Geneva agreement would fall into pieces, but the fresh information assures that both of them are willing to be in touch even if they are having their particular issues.
China’s Aggressive Response to US Semiconductor Moves
Immediately after the US government triggered the move which was aimed at restricting the access of China to the latest technology in the semiconductor industry, the Chinese authorities made it known that they would sue every company or person who abets the US in their bid to block the use of advanced Chinese semiconductors. This tit-for-tat situation takes place in the ongoing economic standoff between the two powers where they are still working out the issues related to the trade.
Despite the ongoing tension, it appears that some analysts have fingers crossed that those legal claims are not separate episodes but planned acts to make sure the dialogue remains the focal point preventing a spiral into the impasse zone.
Impact on US Businesses and Global Trade
The aftermath of the trade war is the cog that keeps global economy going. The Laws of the Jungle Economic Society of the US have already begun to feel the heat of the big turnover of tariffs. For example, the world’s leading manufacturer of mobile phone gadgets, Apple had a dramatic fall in exports going to China however the same level was observed almost ten years ago. At the same time, big business like Nike is clueing the consumer on upcoming price hikes that are unavoidable due to the increased price of materials and production that come from the tariffs.
Given these developments, analysts have started to sound the alarm about the possibility of stagflation, which occurs when inflation fades away and growth becomes slower, respectively.
EU Proposes Certain Trade Measures to the US
While the whole world is watching with bated breath the two largest economies in the world, the EU has made on her own steps forward thereby she has come out with a fresh proposal to the US for the purpose of solving its relevant trade disputes with the government of President Trump. This new initiative consists of a step-by-step decrease in duties that are applied to non-sensitive goods, as well as the intention of closer cooperation with the US in certain key sectors such as energy and AI.
Loud and clear, the EU has informed that in the event of a stuck dialogue, she would raise her stake of tariffs to an amount equal to $108 billion, which would further turn the circus of international relations into a real mess.
US Trade Relations Likely to Take a Longer Period Before Normalization
China and the US are in the process of reworking their trade policies, the ending of which is still not known. However, the wait is there both for the business community and the consumers as to the time the ongoing trade issues would take before they can start realizing what are the effects on their pockets. Undoubtedly, there is still a lot of hope but the fact remains that the economic side effect of these trade policies is unavoidable hence the rippling of the same across the various industries is yet to be over.
As the 90-day period of the trade war truce is about to end, everybody is wondering whether the U.S. and China can find a solution that will last or a situation will simply get worse again.
