As talks continue between the US and China, there is another new proposed tariff on the trade with China that amounts to nearly $300 billion dollars. The Dow Jones industrial Average has slipped by 229 points today.
The proposed 10% tariff comes in to effect next year, this is a separate tariff and will not be covered by the earlier imposed tariffs. With fears of a recession next year from soaring prices on imports, both the Nasdaq and Dow Jones are set close at the lowest rate of 2019.
The true damage of this trade war could potentially disrupt supply chains in nearly every global market.
So when does it all go in to effect?
If there is no agreement on making the prices more stable, September 1 2019. Many industry leaders are divided on the potential split, Goldman Sachs predicts that a recession will occur from this proposed tariff increase next year but Gregory Draco (chief U.S. economist of Oxford Economics) .
In previous recent trends, President Trump has proposed tariffs before but have called them off by making agreements with China’s Foreign Ministry.
The key point to take from this potential trade war is who will face the cost? Will businesses cover the cost increases, just half of the increase or will they past the cost on to the consumer?