The United States imports many more goods from China than they export to them. A lot more. Last year, the difference was worth over $400 billion.
You have certainly heard about the tariffs on China that President Donald Trump plans to impose. However, knowing what is actually going to happen next remains to be seen.
How are the tariffs going to affect the world economy? Read on the find out what the top experts are saying.
How Does a Tariff Work?
Tariffs are taxes that a government charges on citizens and corporations that are purchasing imported goods from another country.
The goal behind the Trump tariffs is to incentivize Americans to do business with American businesses, thus stimulating the national economy.
The Tariffs on China: The Lowdown
Last year alone, China sold well over $500 billion in goods to the US. Donald Trump asserts that such a massive trade deficit is bad for American citizens and also for the global economy.
Trump’s plan is to impose tariffs on at least $300 billion worth of Chinese imports. Furthermore, he has been very critical of the Chinese government’s failure to control what many consider to be blatant theft of US intellectual property by their citizens.
China and the US have a very deep and complex relationship ever since the American Revolution. The economic partnership is both vast and crucial for the two nations.
Over the years, however, there have been times when this partnership has been tenuous at best. The two countries have been rivals in economics, politics, and even sports.
Many believe we are on the bring, if not in the middle of, a full-scale trade war.
How Will This Effect The World Economy
These tariffs are on top of a number of tariffs that are already in place. Unfortunately, there can be negative consequences for companies in both nations.
For American businesses, their costs will increase. Many rely on Chinese imports due to their lower costs. It could be assumed that many businesses will not be able to pay the tariffs or afford to buy the more expensive American goods.
Chinese businesses that depend on selling to American nationals and companies will also take a hit. There will be fewer people willing to pay the tariffs or they might have to buy less than intended. Experts believe this will stall economic growth on a worldwide level.
Many are hopeful that eventually a sensible deal will be made anytime soon. Neither country seemed willing to stand down.
Business financing is one market to follow in these times of economic uncertainty. Experts recommend using tools like Fundygo for small business loans that can help you and your business get through any downfall from the tariffs.
Be Informed, Stay Ready
Between the absolute madness that make up today’s current events, Donald Trump’s latest Twitter rant, and whatever it is that going on with tariffs on China right now, it can be extremely difficult to stay up to date with what is going on.
Be sure to read the latest news on world economics because it can affect your small business in a big way.
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