Actually, the reason behind this decision of Donald Trump is a huge purchase in America during Christmas. If there was a huge tariff, then perhaps the bugle of rebellion against Trump would have rang in America. The second reason is that China is not giving Trump a sense. Trump recently asked China to buy soybeans, but China ignored his request. This is the reason why Trump decided to give relief to China, understanding the opportunity. Tariff has been a big weapon in the ongoing trade war between the US and China. But this time Trump had to retreat. Let us understand the reasons behind this decision in detail.
Autumn and Christmas season is the biggest time for shopping in America. During this time American people buy clothes, toys, electronics and household items. It is all possible that there is nothing cheaper than Chinese goods for these things. Most of these goods are imported from China itself. China is also dominated in the US market. Chinese goods, especially clothes and toys, are extremely popular in the US market due to cheap prices. If Donald Trump had implemented high tariffs, Chinese goods prices would have increased drastically. In such a situation, the burden on the pocket of Americans would increase. People would have been plagued by inflation. American would make an outcry over inflation and land on the rebellion. This affects not only the common buyers, but also on American small businessmen. Due to this, public anger against the Trump administration could also erupt.
This is the reason why this decision of Donald Trump shows his compulsion. It is not that Trump’s tariff is being affected only in other countries. It is also affecting the US market itself. That is why Trump himself is saying that he does not want people to stop shopping due to tariff, because it will harm the economy. If Trump did not extend the deadline of the tariff, it could have been that China would have taken more rigorous action. This would make the trade war more terrible. This is the reason that Donald Trump gave 90 days more relief to China just before the deadline was over.
This decision of Donald Trump has averted a dangerous conflict between the two largest economies in the world. The 90 -day trading agreement with China was scheduled to end at 12.15 pm on Tuesday night. If this had happened, the US could have further increased high taxes of 30 percent of the 30 percent released on imports from China and China could have responded to this by increasing the counter duty on US exports.
Extending the duration of this agreement, both countries have got time to resolve some of their differences, which probably cleared the path of the summit between Trump and Chinese President Xi Chinfing later this year. At the same time, American companies doing business with China have also welcomed it.
