Trump's confrontation with China: high risks for the economy

Trump's confrontation with China: high risks for the economy

president Donald Trump is facing another turbulent week Trade wars and faces an urgent need to de-escalate the conflict it has sparked with China before it inflicts deep damage on the U.S. economy.

The geopolitical tensions between the USA and China

Chinese President Xi Jinping is so far rejecting pressure from the US to make a call to his American counterpart and seek a "deal" after the United States slapped 145% tariffs on its rival. This leads to a direct confrontation that has long been feared.

Trump and his strategic challenges

While Trump reassures Americans and emphasizes that his "great relationship" with the Chinese leader will avert a crisis, he fails to initiate talks in a stalemate that risks stock markets collapsing again real hardships are probably inevitable for Americans.

Trump's appearance in the public eye

Despite the uncertainty, Trump presents himself as someone who enjoys the many conflicts that he himself has instigated. He enjoyed a standing ovation at a UFC MMA event in Florida and said his reception was "somewhat legendary" and showed that "we're doing a good job."

The economic impact of a trade war

However, the conflict with China is a serious power struggle with much higher stakes. The deadlock is so serious because the US and Chinese economies are closely intertwined. The U.S. relies on China for consumer electronics, rare earths for electric vehicle manufacturing, and military applications and robotics. This also includes pharmaceutical products used in life-saving medications, as well as basic everyday items such as clothing and shoes.

U.S. exports of foods like soybeans and sorghum to China are critical to the livelihoods of American farmers. But the tariffs imposed by both sides are so high that trade could effectively stall.

What is the price of a trade war?

Both sides could suffer badly from an all-out trade war, and U.S. consumers could face shortages and rising prices. However, some experts believe that China, given its authoritarian system of government, may be willing to inflict more pain on its people to avoid losing a crucial battle against the United States.

China's retaliation

China has reciprocal tariffs of 34% imposed on all imports from the United States starting April 10, including export controls on seven types of rare earths such as samarium, gadolinium and terbium.