U.S has been enraged due to China’s theft of U.S intellectual property (IP), accordingly the mammoth has initiated an investigation using section 301 US Trade Act of 1974.
A trade war between the U.S and China is brewing and could be the biggest risk for global investors. President Donald Trump has frequently voiced his concerns about his country’s trade due bills with several countries including China, and his conduct is attempting to open up China’s economy to U.S companies.
Since the president’s initiation might conclude to a trade war between the two countries, which would bind introduction of tariffs and quotas on imports. Even though Trump’s Commerce Secretary Wilbur Ross has previously said that the president will take” bold action” to dwell with Chinese steel imports entering the market.
China meanwhile has flashed the use of Section 301 as an act of aggression because the act grants the president of United States to act against Chinese economy without consulting the World Trade Organization, as the country has been the member of the organization since 2001. Moreover U.S leaders were agitated due to the use of such act as they anticipated WTO’s framework had more acceptance, and even allies were accusing about its use.
The Chinese state media has been alive with condemnation for even considering the use of section 301. They have been addressing the Trump authorities across deviating from WTO since January.
An economist Susan Joho in an email to CNBC at Julius Baer flashed that “Chinese trade data for July disappointed market consensus expectations. Both yearly export and import growth moderated in comparison with the previous month, against expectations for remaining just as strong”.
Thus we expect U.S to act economically and approve the facts. If not maintained both the countries trading will be endangered as China may not sit back and take necessary measures to protect its own acknowledged rights.
Image Source: Doug Mills/The New York Times