Question

Please explain this statement

Mr. Trump’s threatened tariffs on $60 billion worth of other Chinese-made products are likely to prompt more retaliation from China, which could single out more valuable American exports such as soybeans and hurt Apple and other companies that rely heavily on Chinese consumers.

Answer 1

Ths is true as any protectionary policy initiated by the US government would be retaliated by China in the form of more protectionist trade policies against America. China would increase tariffs on various more valuable American exports like soybeans, which will further deteriorate America's trade balance. Therefore, in the long-run, the increased protectionist policies are going to be are going to hurt the American economy. Moreover, various American firms like Apple would be badly affected as these firms rely on the emerging markets like Chian to increase sales and earn a significant portion of its total revenue. If China places more protectionist policies against the products of these firms, the sales of these firms would be affected, which would affect the American economy as well