US Pres. Trump: China has totally violated its agreement with US
In a post published on Truth Social on Friday, United States (US) President Donald Trump said that China has violated its agreement with the US.
After explaining how "very high tariffs" made it impossible for China to trade with the US and cause factory shutdowns, President Trump continued:
"I made a fast deal with China in order to save them from what I thought was going to be a very bad situation, and I didn’t want to see that happen."
"Because of this deal, everything quickly stabilized and China got back to business as usual. Everybody was happy! That is the good news!!! The bad news is that China, perhaps not surprisingly to some, has totally violated its agreement with us," Trump added.
Market reaction
The US Dollar (USD) Index edged slightly lower with the immediate reaction to these remarks. At the time of press, the USD Index was up 0.12% on the day at 99.45.
Tariffs FAQs
Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.
Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.
There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.
During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.
Recommended Articles
