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US-China Hegemony War and Tariff War: Development Process and Economic Impact

1. Commencement of US Tariff War

• The US officially commenced the tariff war from February 4th.
• Tariffs on Canada and Mexico were suspended for one month.
• An immediate tariff imposition decision was made against China.
• Consequently, China immediately implemented retaliatory measures.

2. Market Response to the Tariff War

• Contrary to expectations, the market remained stable without significant shocks.
• Reason: The market had already anticipated the US imposing tariffs on China and China retaliating.
• The stock market reacted tepidly as there were no special changes compared to expectations.

3. Background of US Tariff Measures

• The US is pursuing tariff policies under the pretext of resolving trade deficits.
• However, the ultimate goal is to check China's economic and industrial hegemony.
• The intention is to increase negotiating power through negotiations with Canada and Mexico.
• China already had a significant tariff burden, and an additional 10% tariff was imposed to apply pressure.

4. China's Counter Strategy

• China also immediately imposed retaliatory tariffs on the US.
• As for future response strategies, there are two main cards:
  1. Sale of US Treasury Bonds
     • China is one of the world's largest holders of US Treasury bonds.
     • Large-scale sales could significantly shock the US financial market.
  2. Restriction of Rare Earth and Key Mineral Exports
     • Rare earth resources are essential for semiconductors, electric vehicle batteries, etc.
     • If China restricts supply, it is expected to severely impact the US high-tech industry.

5. Impact on Korea

• Korea has a high dependence on intermediate goods exports to China.
• If the US-China trade war intensifies, both Korea's exports to China and exports to the US will be affected.
• Impacts are expected on the semiconductor, automobile, and steel industries, among others.
• In the long term, Korean companies need a supply chain diversification strategy.

6. Future Outlook

• The US is using the tariff war as a negotiating card.
• China is also highly likely to consider countermeasures against the US.
• If the tariff war continues, downward pressure on the global economy will increase.
• Uncertainty is increasing for the world economy, including Korea.

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< Summary >

• The US officially commenced the tariff war from February 4th, suspended measures against Canada and Mexico, but immediately implemented tariffs on China.
• China responded by announcing retaliatory measures.
• The market had already anticipated this, so there was no major shock.
• The US is pursuing tariff policies with the US-China hegemony war in mind, and China has response cards such as selling US Treasury bonds and restricting rare earth resources.
• Korea has a high dependence on intermediate goods exports, so it is likely to be directly affected by the US-China trade war.
• Uncertainty in the global economy is likely to increase in the future.

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[More…]

• Intensification of the US-China Hegemony War and Economic Impact
  👉 https://nextgeninsight.net/?s=%EB%AF%B8%EC%A4%91%ED%8C%A8%EA%B6%8C

• Analysis of the Impact of the Tariff War on the Korean Economy
  👉 https://nextgeninsight.net/?s=%EA%B4%80%EC%84%B8%EC%A0%84%EC%9F%81

*YouTube Source: [경제 읽어주는 남자(김광석TV)]

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