The Dollar hit a three-year low against the Euro on Thursday, following market reaction to Trump’s decision to impose fresh levies on imported goods. Despite the slide, the White House has maintained that the tariffs are part of a broader economic plan designed to boost domestic industry and generate long-term gains for the country.

“Tariffs will make the US richer,” White House officials said, defending the move amid mounting criticism from trading partners and financial analysts.

China, in a swift response, imposed its own duties on US products, signalling its readiness to retaliate against any further measures from Washington. The tit-for-tat exchange has raised fears of a growing trade dispute that could reverberate across the global economy.

Before the tariffs took effect, China was exporting more than $430 billion worth of goods to the US each year. While significant, that figure makes up only about 2% of China’s overall gross domestic product. Furthermore, just 15% of its total exports were bound for the American market, giving Beijing greater flexibility than many had assumed.

“China can absorb the heat from Washington while others can’t, giving Beijing room to push back,” reported the BBC’s Stephen McDonell from Beijing.

With both sides digging in their heels, the prospect of a full-scale trade war remains a concern for investors and international observers alike.

--ChannelAfrica--