Punitive tariffs have the potential to cause a substantial fall in US imports from China – a 60% tariff, for example, could cut imports from China by about a third over the next two years, with further falls after that. Some countries that face lower US tariffs, including Mexico, India and possibly Vietnam, might gain US market share as a result. But it’s also likely that China’s exporters will seek to make further inroads into other markets, both in advanced and emerging economies. As well as exerting downward pressure on inflation, that will put more strain on their domestic industries and add to geopolitical tensions.
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