The impact of Beijing’s new round of import duties on the US products

The latest development hit the global markets, where China imposed a new round of 25 per cent tariffs on US products worth $60 bn.

Beijing was warned by Trump of the escalating trade conflicts and their aftereffects. Still, in the tit-for-tat battle, it announced the new import duties on 2,500 products, including consumer goods, food items, machinery, and chemicals. 

The announcement resulted in losses in the Hong Kong markets, which initially sank 1.7 per cent, Shanghai was 0.2 per cent down, and Japan was 0.7 per cent down. 

Markets in Singapore, Sydney, and Taipei were also down. It was one of the worst days on the NASDAQ of the current year, ending at the lowest point of 3 months. 

Farmers and businesses hit by the new round of duties 

The new tariffs by China will hit American farmers the most, who are the rural voters and the main supporters of President Trump, the key to his reelection. 

The experts say the situation is very challenging for the farmers, especially in the Midwest, facing the problems created by the March historic floods. 

Farmers had planted only 49 per cent of the corn they intended to plant, one of the slowest growths since 1980. Ultimately, all these will lower the net income of farmers. 

Trump administration is preparing to announce aid for the farmers hurt by the new trade restrictions, and it is estimated the package assistance could be more than $15 billion. The administration is preparing to pay $2 a bushel for soybeans, 4 cents for corn and 63 cents for wheat. 

The farmers said the amount is more than last year, where corn was given 1 cent for a bushel, but this will not resolve their issues as the farmers' income dropped by 16 per cent in 2018.  

Consumer goods will become expensive. 

The sudden announcement will hit several companies, and many US jobs will be lost, while buyers will face higher prices. Suddenly, items like backpacks, knot fabric, travel bags, CD cases, wooden shingles, reptile leather, and other consumer items will become expensive. 

Stores began modifying and passing the increased costs to the consumer. Initially, some firms tried to shield buyers from the increased rates, but now, with the new announcements, it may become difficult for them to handle the new costs with limited resources. 

Goldman Sachs estimates if the US president announces to impose duties on the remaining goods worth $300 billion, it will lower the earnings of American companies by 6 per cent. 

Probably, the impact may be less as companies increase their costs to handle the import duties, but consumer prices may increase by at least 1 per cent due to higher taxes. 

Experts believe threatening each other is not the best way to conduct business, and the US Chamber is concerned about these new policies.