There is a strong possibility that US President Donald Trump will impose tariffs on all goods coming into America from China, says investment bank Goldman Sachs.
“Following President Trump's threat of further escalation, we now think the probability that all imports from China will ultimately be subject to tariffs has risen to 60 percent,” the bank's analysts wrote in a research note, quoted by media.
Last week, Trump ordered a new package of duties on around $200 billion worth of Chinese goods, with China retaliating with $60 billion in US goods. Earlier, he threatened Beijing with further tariffs on around $267 billion of imports if Beijing retaliates against the latest measure.
The new restrictive measures against China would also result in an inflation rise in the US, Goldman warns.
“The measures announced to date look set to push up US core [personal consumption] inflation by around 0.1pp, and about twice that if the next round of China tariffs materializes,” the bank wrote.
“While further negotiations between US and Chinese officials are likely, we believe additional tariffs remain the most likely outcome,” Goldman said.
After the $200 billion tariffs officially came into force Monday, Beijing reportedly cancelled scheduled talks with Washington, which had been intended to defuse trade tensions.
In a white paper, published Monday, China said the US was applying “extreme pressure” on Beijing to push forward its own interests, while pursuing “economic hegemony.”
The US is “making false accusations against many countries and regions, particularly China, intimidating other countries through economic measures such as imposing tariffs.”
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