Fears of trade war and slowdown in recovery with US set to slap $60bn tariff bill on China

Fears of a trade war and a subsequent downturn in the global economy grew  this week as several US media outlets  reported that President Donald Trump  was considering imposing  up to $60bn of additional tariffs on Chinese goods as punishment for alleged intellectual property infringements. The tariffs, that  would most probably target the technology, telecommunications and garment sectors, could be put in place by the end of the month and would come  on top of the recent restrictions on steel and aluminium imports, as Trump steps up his “America first” protectionist policy.
The Trump administration is seeking to invoke Section 301 of the US Trade Act to allow president to impose import tariffs to sanction unfair trade practices. The Office of the US. Trade Representative (USTR) has accused China of infringing on U.S. intellectual property rights, including the widespread counterfeiting of goods and has also   criticised China for demanding that U.S. companies transfer their technology when setting up local units in China.
Even before the news of the impending new tariffs broke, the OECD think tank was warning that a trade war prompted  by US protectionism  threatened  to derail the recovery in global growth, that has reached  its highest level in seven years. While  the Paris-based organisation said  that it currently  expected the world economy to expand by 3.9% in both 2018 and 2019, it added that a trade warewould pose a “significant risk” to that recovery.

Source: reuters