Fears of trade war and slowdown in recovery with US set to slap $60bn tariff bill on China


Fears of a trade war and a subsequent downturn in the global economy grew this week as several US media outlets reported that President Donald Trump was considering imposing up to $60bn of additional tariffs on Chinese goods as punishment for alleged intellectual property infringements. The tariffs, that would most probably target the technology, telecommunications and garment sectors, could be put in place by the end of the month and would come on top of the recent restrictions on steel and aluminium imports, as Trump steps up his “America first” protectionist policy.
The Trump administration is seeking to invoke Section 301 of the US Trade Act to allow president to impose import tariffs to sanction unfair trade practices. The Office of the US. Trade Representative (USTR) has accused China of infringing on U.S. intellectual property rights, including the widespread counterfeiting of goods and has also criticised China for demanding that U.S. companies transfer their technology when setting up local units in China.
Even before the news of the impending new tariffs broke, the OECD think tank was warning that a trade war prompted by US protectionism threatened to derail the recovery in global growth, that has reached its highest level in seven years. While the Paris-based organisation said that it currently expected the world economy to expand by 3.9% in both 2018 and 2019, it added that a trade warewould pose a “significant risk” to that recovery.

Source: reuters