United States-China trade tensions that have lasted more than a year have hit negatively on consumers and many producers in both countries. Rates have reduced trade between the US and China, but the bilateral trade deficit has remained unchanged broadly, according to the International Monetary Fund (IMF) economists.
Economists Eugenio Cerutti, Gita Gopinath, and Adil Mohommad showed that more restrictions on imports will also make consumer goods that can be traded more affordable, thus disproportionately disadvantaging low-income households. This type of scenario is one reason why 2019 is called a difficult year for the global economy.
The economists view an increase in US rates to 25% from US$200 billion in annual Chinese imports on May 10, along with China’s retaliation of US$60 billion, marking the latest increase in trade tensions between the two strongest economies.
The impact of the tariffs previously imposed by the US and subsequent retaliation by China has been proven in trade data, that tensions have hit most of the domestic production and consumption sector.