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US-China trade war: The levers that two nations can pull

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US-China trade war: The levers that two nations can pull
Credits: Nikkei Asian Review

US-China trade war has already begun after U.S. Commerce Department blacklisted Chinese technology companies. However, this may create some difficulties in the world’s financial markets.

The US-China trade war

Now, America and China are increasing pressure on each other and the war has gone beyond the tariffs. Previously, Donald Trump also warned that if the meeting does not have positive results, then he will proceed with new rounds of the tariff.

This month, Chinese President Xi Jinping and US president are expected to meet in Japan at the G20 summit. Furthermore, Trump added that trade war would end if it is negotiated before the summit.

Since May 2019, the relationship between and America and China have declined. Also, Beijing has decided to give a response to Trump after blacklisting Huawei. Moreover, America is planning to extend tariffs to cover almost all Chinese imports.

But there is still hope. G20 may reduce the tension between both countries. However, if nothing goes according to the plans, then Trump may go further with a new round of tariffs.

What are the pressure points on both sides?

Rare earth metals

China exports around 80% of metals to America. There are high chances of cutting off supplies of the metals to the United States. Metal is the main ingredient used to build military equipment and electronics in America.

Harassing US companies or slowing visa approvals

China will draft a list that would include the names of foreign organizations and firms that are harming the Chinese companies. However, their idea could backfire because millions of Chinese citizens are dependent on foreign tech firms. Besides, it will not allow the famous restaurants and backs to do business in China such as Dedex and Starbucks.

Diplomatic recalcitrance and military posturing

Beijing won’t cooperate with American in international matters which includes Iran and North Korea.

Higher tariffs by the US

Trump will increase tariffs on all the Chinese imports which were being spared. They would raise more than $50 billion worth of Chinese imports on electronics, machinery and much more.

Justice department crackdown

The American Department of Justice will hunt down the Chinese hackers and spies for stealing trade secrets and technology of America.

Foreign policy

America will also find out the Chinese companies that are helping North Korea for nuclear programs.

Check out The Geek Herald for more updates.

US blacklists five Chinese technology firms

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