On Wednesday morning, the trade tariffs previously announced by President Donald Trump were imposed – including import tariffs of 104% on Chinese products.
– Everything the US buys from China will disappear. There will be a huge price shock in every way and shortages of all kinds of things, warns Alexis von Sydow, China analyst at the Swedish Institute of International Affairs.
In addition, an additional tariff on some selected Chinese goods will begin to be levied during the day, according to White House press secretary Karoline Leavitt.
She claims that Trump is confident that the Chinese will back down and withdraw their counter-tariffs – reiterating Trump’s message that the US has been unfairly treated as a trading partner and will ultimately be the big winner, becoming richer and more prosperous as a country from the tariffs.
The Trump administration has claimed, among other things, that the measures will lead to the creation of more American jobs and shift much of the production that takes place abroad to the United States.
However, most people do not seem to believe in this strategy, as evidenced by the stock market’s blood-red figures. China, for example, has announced that it is ready to fight “to the end”, and Alexis von Sydow believes that the tariffs mean that “everyone is in trouble”, and that many product categories will skyrocket in price.
“Will escalate”
Fredrik Cho, China consultant and vice-chairman of the Sweden-China Trade Council, agrees and does not believe that either side is ready to back down or that the conflict is coming to an end.
– Lots of companies will be wiped out, he predicts, and continues:
– It will escalate further. This will go on for quite a while,
It’s worth noting that China is by far the US’s top importing country, importing around $450 billion worth of goods last year. Many of these – such as electronics – are now expected to soar in price.
Cho emphasizes that Trump’s policy is directly counterproductive as it will negatively affect the US economy – while rapidly forcing China in the direction its leaders aspire to – with a greater focus on the domestic market.
– It will accelerate the process towards what the Chinese government wants. They want to focus more on domestic demand and consumption.
Sweden can “find new trade routes”
He does not see any disastrous effects for China, but it may be difficult for the Chinese to achieve the set growth target.
– It is clear that it will be noticed and there will be a bump in the curve.
How the tariffs will affect Sweden and other EU countries is not entirely clear. However, the centre-right government has warned of lower growth and price shocks on many products can be expected.
– In the longer term, there are other effects. For example, we will find new trade routes and will not trade in the same way if the tariffs remain in place in the longer term… But growth will decrease and that is why we say that this is bad, commented Elisabeth Svantesson, the Conservative finance minister, last week.
