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The trade war between America and China has escalated, fueling the fear that the world economy can be dragged away.
At night, President Donald Trump announced a new 10% rate of $ 200 billion on Chinese goods arriving in the US starting next week. At the end of the year this will increase to 25%.
It's the newest step in Trump's fight against & # 39; Dishonest & # 39; trade policy, whose fears of economists will prove counterproductive.
Trump left China last night when he announced the move and said:
"For months we have urged China to change these unfair practices and give fair and mutual treatment to American companies, we have been very clear about the kind of change that needs to be made, and we have given China every opportunity to treat more honestly.
But until now, China was not willing to change its practices. "
And in a typical Trumpian bloom, he added:
"I urge Chinese leaders to take swift action to end their country's unfair trade practices and hopefully this trade situation will ultimately be resolved by myself and President Xi of China, for whom I have great respect and affection."
Thousands of Chinese products will now be more expensive in America, from fish, meat and vegetables to chemicals, furniture, metals and electrical goods.
This will reduce the demand for these products (harming the Chinese economy), and probably also increase prices in American stores (hurt Americans).
The move will disappoint the city, where traders stick to the hope of a peace agreement. Instead, we are now waiting for the retaliation of China.
With the move of Trump, America now has rates for about half of China's imports (last year it was more than $ 500 billion). China imports only about $ 130 billion from America, meaning it can not just announce a tit-for-tat reprisal.
According to Bloomberg, Chinese Deputy Prime Minister Liu He will hold a meeting in Beijing Tuesday morning to discuss the government's response. China could decide to stop next week at planned trade negotiations in Washington if it feels that Trump is showing insufficient goodwill.
8.15 hrs BST: President Mario Draghi, President of the European Central Bank, speaks in Paris