The protracted conflict between the world\u2019s two largest economies – US and China – got in full swing over summer. Both countries imposed tariffs on billions of dollars of another’s import goods. The cumulative amount of tariffs is staggering: US has slapped tariffs on $550 billion of Chinese goods while China has set tariffs on $185 billion of US goods.<\/p>\n\n\n\n
The US is also imposing $7.5 billion tariffs on EU goods, a proposal that was arbitrated by the WTO early october in the US\u2019s favor. Aircraft manufacturer Airbus (10% tariff) and agricultural products (25% tariff) seem to be particularly hard hit in four countries the WTO deems responsible for the illegal subsidies to Airbus (France, Germany, Spain and the UK). <\/p>\n\n\n\n
In different words, Scotch whisky, French wine, Spanish olives and Italian cheese may get a lot more expensive for US buyers. The EU could \u201creciprocate\u201d with a set of tariffs as well<\/p>\n\n\n\n
What thus initially appeared as a Tweet War has become a Trade war with Presidents Xi and Trump stuck in a \u201ctit for tat\u201d war.<\/p>\n\n\n\n
In the heat of the storm, one may well ask what the underlying reason is for the conflict and who is the real victim?<\/p>\n\n\n\n
According to Trump, the US is suffering from “unfair trade” and intellectual property theft. Over summer, the President tweeted:<\/p>\n\n\n\n
When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don\u2019t trade anymore-we win big. It\u2019s easy!<\/p>\u2014 Donald J. Trump (@realDonaldTrump) March 2, 2018<\/a><\/blockquote>\n\n\n\n
![\"How](\"https:\/\/novicap.com\/assets\/uploads\/2019\/11\/how-tweet-wars-became-trade-wars.jpg\")
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