As the US-China trade war intensifies, Chinese President Xi Jinping embarks on a three-country tour to Southeast Asia in a bid to strengthen ties with key manufacturing hubs. With tensions running high and no clear resolution in sight, investors remain wary as global markets continue to feel the pinch.
The trade war initiated by US President Donald Trump continues to wreak havoc on the global economy, with Chinese President Xi Jinping arriving in Vietnam to discuss the fallout. The visit marks the first leg of a three-country tour to Southeast Asia, as Beijing seeks to strengthen ties with key manufacturing hubs.
A trade war occurs when two or more countries impose tariffs or other trade barriers on each other's goods and services.
This can lead to retaliatory measures, resulting in a cycle of escalating protectionism.
According to the World Trade Organization (WTO), the global trade war has cost over $700 billion in lost economic output since 2018.
The US-China trade war, for instance, has seen both countries impose tariffs on billions of dollars' worth of goods.
In an article published in Vietnam’s Communist Party newspaper, Nhandan, Xi Jinping reiterated China’s position on US President Trump‘s trade war: ‘There are no winners in trade wars and tariff wars, and protectionism has no way out.’ The Chinese leader called for stronger ties with Vietnam, which exports a majority of its goods to the US, amidst a 46% US customs duty that will come into effect in July.
In a partial relief for Asian markets, the US exempted smartphones and laptops from tariffs imposed by the Trump administration on imports. However, President Trump dampened the rebound, saying he would announce new tariffs on semiconductors ‘over the next week.’ The US Dollar extended its losses against major currencies, with gold hitting a new peak of $3,245.75 as investors remain wary.
Japanese Prime Minister Shigeru Ishiba warned that US tariffs have the potential to disrupt the global economic order, urging his government to seek common ground with the US. The country is facing a 24% tariff on goods exported to the US and a 25% tariff on automobiles.
President Trump reiterated his views on the $15 billion bid by Japan’s Nippon Steel to buy US Steel, saying that foreign companies should not control American-owned firms. The deal has faced headwinds from the beginning, with even former US President Joe Biden asserting that US Steel should remain American-owned.
US Steel is one of the largest steel producers in the world, with a history dating back to 1901.
The company was founded by J.P. Morgan and Elbert Gary, and its first mill was built in Duquesne, Pennsylvania.
Today, US Steel produces over 25 million tons of steel annually, making it a significant contributor to the global steel market.
The company has played a crucial role in shaping America's infrastructure, from building iconic landmarks like the 'Golden Gate Bridge' to constructing major highways and skyscrapers.
As leaders try to reason with President Trump or negotiate for a lower customs duty, the fallout from the global tariff war continues. With Chinese President Xi Jinping arriving in Vietnam, Cambodia, and Malaysia on his three-country tour to Southeast Asia, the stakes are high. Will the US and China find common ground, or will the trade war continue to disrupt the global economy? Only time will tell.
