After Trump's ‘tactical retreat', analysts warn ‘crazy' week is just the beginning
While US President Donald Trump's Wednesday announcement of a 90-day pause on the punitive levies he had aimed at most other nations is a 'a tactical retreat', analysts said, 'no one should relax' as this does not augur any shift in his overall objectives.
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Amid this 'retreat', tariffs on imports from China were
raised to 125 per cent following a retaliatory increase in tariffs from Beijing. Stephen Olson, a visiting senior fellow at the ISEAS-Yusof Ishak Institute in Singapore, cautioned this means the world's two largest economies remain locked in a dangerous, intensifying trade war.
'When the dust settles, we'll be in a much higher tariff world than we were when Trump walked into office,' he said.
While Olson described Trump's move as 'taking a sledgehammer' to the rules-based trade system that has been established for decades and said the 'threat' of even higher tariffs from Trump 'will never recede', other analysts expressed foreboding over the impact the past week's actions will have on
global supply chains
'This is a scary moment. You're also talking about the supply chain completely out of whack now in the coming weeks and months,' said Victor Gao, vice-president of the Beijing-based think tank Centre for China and Globalisation. 'It will cause a lot of pain not only to China and the US, but to other countries.'
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A report by ING noted the current tariffs on Chinese products could provide tax revenue of US$835 billion, calling the current situation 'not only chaotic, [but] crazy.'
However, the financial services firm added that figure would drop to zero if 'China simply stops exporting' the way several European companies had already announced.
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