The US government is trying to control the whole trade war situation, but it seems like Trump administration is losing it. Trade war, which started with China a few months ago has so far taken on many techs and retail companies which are dependent on Chinese suppliers. The wall street market is already showing panic because investors are worried about the whole current situation between US-China. Trade officials of both countries have come together to resolve this issue, but they have miserably failed at it.
Recently Trump decided to levy 25% of taxes on chinese goods, which is going to raise the cost of all consumer and durable goods which US consumers consume daily. Now some analysts from Morgan Stanley think if the same situation goes on then, it will create a problem of recession. Trade tensions between these two countries have reached another peak because recently, Trump tweeted about his decision of putting tariffs on Mexico also. Now Mexican goods are going to levy an extra 5% of taxes to stop the illegal immigration.
Investors on Wall Street are worried about this whole situation because there are many tech companies which still gets a supply of electronic chips from China. Mexico is famous for providing automobile parts and since the tariff is going to increase cost of cars significantly for US consumers. Analysts from Morgan Stanley said that growth of the US is going to get stagnant and even after some point it might hit a recession also.
US-based companies have already started to reduce their capital sauvignon goods and services, which shows that there’s a situation of panic in the business industry. The geopolitical position of a trade war is negatively affecting on country’s economy and only trade deals between China-US will save it from getting into recession.