Retaliatory Sanctions On USA
- 14 May 2019
Why is it in News?
- China announced on 14th May that it would increase tariffs on $60 billion worth of U.S. goods from June 1, in response to the recent round of U.S. tariff hikes and its plans to target nearly all Chinese imports.
- A total of 5,140 U.S. products will be subject to additional tariffs of 5%, 10%, 20% and 25% starting June 1.
- US believes that China has taken advantage of the US economy for years, mainly by stealing intellectual property and taking over millions of American jobs therefore the tariffs would compel China to curb its unfair trade practices.
Relevance of the News:
Slapping of sanctions by US and China upon each other can bring instability in the global economy trade thereby affecting India’s economic interests.
Failed Trade Talks:
- On 10th May, the latest round of US-China trade negotiations concluded without a deal and on the same day the US increased tariffs on $200 billion worth of Chinese goods.
- The US had also ordered the initiation of the imposition of new duties on Chinese goods worth $300 billion.
Previous Sanctions:
- Earlier in September 2018 also the US and China imposed sanctions on each other. The U.S. imposed 10% tariffs on $200 billion of Chinese imports in September and China responded by placing tariffs of 5 to 10% on over 5000 US categories.
- Starting March 2018, both USA and China had imposed tariffs on each other’s goods worth billions of dollars. However, in December 2018 during the G20 summit in Argentina both the leaders agreed to halt the escalation of tariffs but the tariff war started again in May 2019 following the failure of talks.
