No, there still is no new trade agreement between the United States and China and the trade war between the two nations is heating up as President Trump promised to add tariffs to another $300 billion in Chinese imports after labeling China a currency manipulator (A weaker currency helps Chinese factories offset the higher costs of tariffs when selling their goods to the US). This has caused central banks in India, Thailand and New Zealand to cut interest rates to fend off potential harm from the escalating trade war. As China’s economy has grown into a technology powerhouse a trade deal between the two nations is crucial for the global economy. So too, can a prolonged trade war be calamitous.
In response to the Trump Administration’s ban on Chinese technological juggernaut Huawei from working in the US, China has suspended US agricultural purchases squeezing Midwestern farmers who rely on the Chinese marketplace. Many analysists fear China may go even further, by continuing to devalue their currency. There is also a belief by some that China will look to extend the hardship on farmers through the 2020 election.
So, how will this impact consumers? Well, according to trade analysts, this next round of tariffs will hit harder than previous ones because the focus this time around is on consumer goods. Previous tariffs mainly targeted industrial goods. Still, a 10 percent tariff shouldn’t increase the cost of good that much. Should the tariff rise to 25 percent though, consumers will really start to feel it. As with previous tariff threats, expect to see as many front-loaded shipments as possible before September 1st.