An American multinational finance company has warned that the risk of a trade war between the US and China is growing fast.
Analysts from Goldman Sachs said they saw “little reason to believe” that US President Donald Trump would back down on imposing restrictions on Chinese imports such as steel and machinery.
Trump has repeatedly slammed China’s trade practices and threatened to impose punitive tariffs on the country’s imports. He dismissed many Chinese policies as unfair.
Trump’s trade advisor Peter Navarro has recently proposed a blanket 45 percent tariff on all Chinese-made goods.
Godman analysts say Trump administration is likely to make an announcement on China’s currency policy and impose unilateral tariffs on a number of products.
They added that in the near-term Trump’s administration is “likely to be limited to targeted actions, with blanket tariffs held out as an additional tool that might be used later.”
A Chinese trade expert Tu Xinqan said a 45 percent tariff plan would start a full-blown trade war almost instantly.
“Of course, if a 45 percent tariff were imposed, it would trigger a trade war. China would definitely retaliate and would likely go above and beyond the US measures, potentially imposing tariffs as high as 80- 90 percent on imports from the US,” he said.
Last month China’s state-run Global Times newspaper warned that US business could be targeted for retaliation in any trade war ushered in by President Trump.
China’s Commerce Ministry spokesman Sun Jiwen said Beijing is willing to work with the new US administration to promote a healthy development of commercial ties.