May 10, 2019 5:43:57 pm
Tensions between the United States and China escalated Friday after the former hiked levies on $200 billion worth of Chinese goods in the midst of last-ditch talks to rescue a trade deal. Although Beijing threatened retaliation, negotiators waited for the second day of talks in Washington to conclude, thus giving hopes of an eventual agreement.
China planning to retaliate
In a statement released on Friday, China’s Ministry of Commerce said the government “deeply regrets that it will have to take necessary countermeasures.” However, the countermeasures that the country might take were not specified. “It is hoped that the US and Chinese sides will meet each other halfway and work together,” the statement added. Chinese Foreign Ministry spokesperson Geng Shuang said that “sound and stable relations were in the best interest of both countries and the international community.” The Chinese share markets fell on Friday but quickly recovered. China’s currency Yuan too strengthened against the US dollar.
Experts analyse China’s likely response
James Green, a former official at Beijing embassy, told Reuters, “I think the Chinese, in the end, will want to keep negotiations going. The question is: where do they go for retaliation?” He also expected that China would increase non-tariff barriers on US companies, like delaying regulatory approvals, news agency Reuters reported.
Gary Shapiro, chief executive of Consumer Technology Association, also told the news agency, “Our industry supports more than 18 million US jobs – but raising tariffs will be disastrous. The tariffs already in place have cost the American technology sector about $1 billion more a month since October. That can be life or death for small businesses and startups that can’t absorb the added costs,” Reuters reported.
Impact on India
The United Nations report said that India is among a handful of countries which might benefit from the ongoing trade war between US and China. India’s export gains are likely to grow by at least 3.5 per cent. However, there could be a short-term impact on the Indian stock markets.
Britain concerned by the trade war
British Prime Minister Theresa May’s spokeswoman Friday said the country is concerned by the escalating trade war between US and China, adding that no one benefits from a trade war, Reuters reported. “We have been saying on this for some time that we are concerned about it and that we are clear that nobody benefits from trade wars. The discussions between the two are ongoing and we hope that they will find a resolution to avoid any further escalation,” she said.
Japan’s economy takes a hit
Japan’s economy on Friday took a hit from lower Chinese exports to the US. Japan’s Deputy Chief Cabinet Secretary Kotaro Nogami told reporters that escalation of trade wars will not serve anyone’s interest and that the country hopes both the economies resolve the trade dispute through dialogue. Nogami added that any trade measures should be in line with the rules set by the World Trade Organisation, Reuters reported.
(With inputs from agencies)
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