How is continuing tariff conflict impacting Australia?
The US-China trade war shows no signs of abating, rather it continues to accelerate. America has put 25% tariffs on $250 billion worth of Chinese imports, and may add an additional 10% tariff on the remaining $300 billion.
Tariffs have been applied over the years to protect home-grown industries by getting locals to buy goods produced domestically and target competitors who are seen as using unfair trade practices. They impose costs on both importers and exporters and had been in decline until the recent U.S.-China trade spat.
Tariffs had fallen out of favour earlier because they often lead to reduced trade, higher prices for consumers in tariff wielding countries and retaliation from abroad. With tariffs once again rising under U.S. President Trump and global trade slowing, many experts fear companies could soon face higher costs and the world economy could suffer.
An escalating trade war between the US and China has pushed the Australian stock market down in the last week, with the benchmark ASX200 index dropping more than 2.4% on Tuesday. No sector was spared, with retailers, financiers and miners all down as a wave of red swept the board. Global markets have also been falling for the past few days amid this escalating conflict.
This kind of damage to superannuation savings of the drop in a market has not been seen since the 2008 global financial crisis. Economists have even warned that if the battle between the US and China continued, the government might need to feed cash into the Australian economy to reduce the chance of a recession.
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