The direct economic effect of the US-China tariff dispute has so far been limited, though that may change as the countries escalate their rhetoric – and their actions – in what could soon be a full-blown trade war, S&P Global Ratings reported yesterday.
An escalation of the current US-China trade dispute that adds a 25-per-cent tariff on all non-fuel goods could shave roughly one percentage point off the US GDP by 2021. For China, the loss to GDP would be around six-tenths of 1 per cent, an article titled “Global Trade at a Crossroads: It’s Hard to See Any Winners in a US-China Trade War”.
“Attempts to help those hurt by globalisation via higher tariffs or other forms of protectionism, even if well meaning, will raise prices and hurt all consumers, especially poor and middle-class families,” US senior economist Satyam Panday said. “Not to mention damage the competitiveness of companies that import raw materials and components from other countries and folks who work in export industries.”