The orange bully in the White House thought he could bully China into doing what he wants. Although backing down on his "reciprocal" tariffs for other countries, he imposed a huge tariff on Chinese goods imported into the United States. And when China did not back down, he raised that tariff to a ridiculous 145%.
That means an import costing $10 would cost $24.50, and one costing $100 would cost $245. Trump thought the huge tariff would force China to beg for relief. They did NOT! Instead, they put a tariff of 125% on any American goods entering their country - making most American goods too expensive for Chinese consumers. It effectively cuts of the huge Chinese market for American producers.
The trade war stare-down was set. Who would blink first? It was DONALD TRUMP!
It turns out that nearly all of the electronics purchased in the United States are made in Asia - most of them in China. Those electronics (smart phones, TV's, computers, etc.) would be hit with the 145% tariff. And there would be no way for American consumers to avoid the massive price hike. They would have to pay the huge price tag, or do without!
It doesn't take a genius to figure out this was going to make Americans very angry. The U.S. public is already angry over continuing inflation (which Trump had promised to fix during the campaign). Such huge price hikes on electronics is guaranteed to hasten Trump's already declining approval with voters.
Realizing he has badly miscalculated, Trump backed down. He exempted electronics and computer chips from any tariff.
Meanwhile, China is holding firm - and it doesn't look like they will back down anytime soon. Knowing they could be selling less of many things to the United States, they are shifting their view to other countries - especially the European Union. Other things China could do - refuse to buy any goods from U.S. farmers, restrict what targeted U.S. corporations could export from (or into) China, cut off the supply of rare earth minerals to the U.S., and devalue the Yuan.
It looks like China is in this for the long haul, and willing to accept some economic pain. Trump is not. He's already shown he'll back down when things get too hot.
Trump can't win this trade war. The only question is how much damage will he do to the U.S. economy before he realizes that.
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