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Europe to Follow US Tariffs on China Amid Risk of Tanking Trade Market

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Europe to Follow US Tariffs on China Amid Risk of Tanking Trade Market
Source: Pinterest

Europe to Follow US Tariffs on China Amid Risk of Tanking Trade Market

Source: Pinterest

European countries may have to make decisions similar to the United States’ government regarding the risk of overconsumption from China. 

The China and U.S. Markets

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It is common knowledge that China is a huge production company. However, if care isn’t taken, the country can overtake many different markets in foreign countries. European countries are at risk and might need to follow the lead of Joe Biden, the President of the United States of America, who put some policies in place to avoid a total overtake by China. 

 

Biden’s Tariffs

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To prevent China from completely overtaking various product markets, Biden implemented some new policies. The most important is that he implemented new tariffs against China to ensure the protection of the citizens’ jobs. He also proposed a new 100% border tax on electric cars imported from China. This way, Chinese products could not take over the country’s markets, and Americans would produce more than they imported. 

China and Overproduction

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China is the leading production company in the world. Not only does the country produce essential goods, but it also supplies them to the rest of the world. Therefore, many of these countries rely heavily on China and the goods it produces. However, this has a negative effect, as the goods usually take over the importing country’s economy, damaging its markets and economy over time.

 

The U.K.’s Move

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Many experts predict that if Europe eventually implements a tariff like that of America, the U.K. will follow closely behind. This is because if China cannot sell its goods to European countries at a fast rate, it’ll have to focus on other big buyers such as the U.K. Therefore, the U.K. would be at risk of losing its own innovative economy, and manufacturers would reduce greatly. 

ALSO READ: US Rattles China, Discovers 2.34 Billion Tons of Gold in Wyoming

Free Trade Among Countries

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Many of the countries that China supplies used to practice free trade, a trading policy that allows free importation and exportation without any restrictions. Many of the countries of the World Trade Organization are under a multilateral trade agreement. However, this has had a negative impact on the economy thanks to the oversaturation of China’s products in these countries. 

 

The Problem With China’s Economy

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On the other hand, China’s economy has been growing at the expense of that of other countries. Therefore, modern manufacturing and exporting are some of the country’s biggest strengths. However, China still faces a couple of problems that its government has not been addressing properly. These include youth unemployment, loss of businesses, property crisis, and more. 

POLL—Should the Government Increase Taxes on the Wealthy To Reduce Economic Inequality?

The ‘China Shock’

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The phenomenon known as the “China Shock” first happened in the 1990s and early 2000s. It happened when many Western nations opened their borders to trading with China. This caused a surge in importation from the country, and many people who worked in manufacturing industries lost their jobs. Therefore, Americans are worried that the country might experience another China Shock soon if care isn’t taken. 

 

Joe Biden’s Pre-active Moves

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However, President Joe Biden is very aware of this probability and is crying to prevent it from happening. Therefore, he put the new tariffs in place to prevent a second shock from happening in America. He also added that his administration was going to ensure that the future of electric vehicles in the country will be made by union workers.

China Overtook the Solar Industry

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China may have one of the biggest production markets in the world but it wasn’t always this way. For example, the solar industry idea started with smaller markets in Europe. However, china’s ability to mass produce gave the country the upper hand, and the manufacturers completely took over the solar power industry. This also happened with wind turbines and other products, and experts are predicting the same with electric vehicles soon. 

ALSO READ: Texas Storms Destroy Swaths of Solar Panels, Sparking Concern

 

Europe Is Still Feeling the Effects of COVID-19

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The European economy is not at its best right now, as it is still struggling with the effects of the COVID-19 pandemic. Therefore, Europe needs to follow America’s lead and increase tariffs to regulate its trading with China. If the European government does not do this, their economy may not survive the predicted China Shock, which would be worse than the first. 

The Friendship Between China and Russia

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Recently, Russian President Vladimir Putin visited China to show the world that the bond between the two countries remains strong. It was also a power show to remind people that he had powerful allies during his war with Ukraine. The president of China, Xi Jinping, gave Putin a warm welcome as the countries have continued to trade and remain close allies. 

 

 

Europe’s Future Is at Stake

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Europe is the last big region that has not made a definite decision about the possible China Shock. America’s president has taken several measures to prevent this, and India has also made similar moves. In India, there is a new de facto ban that does not allow its citizens to use solar panels made in China. Therefore, both Europe and the U.K. have to make some serious decisions really soon. 

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