How China, US tariffs could impact economic outlook

The US' planned tariffs on 34 billion US dollars' worth of Chinese imports took effect on Friday, ratcheting up already heightened tensions between the two sides, with Beijing swiftly announcing it will take necessary countermeasures to safeguard the interests of its people.

The trade frictions of the world's two biggest economies are expected to roil the markets and cast a shadow over the global economic outlook.

US tariffs on Chinese products apply to engines, motors, construction and farming machinery, electrical, transportation and telecom equipment. Counter tariffs by China will hit US agricultural commodities, auto and aquatic products.

The US' planned tariffs on 34 billion US dollars' worth of Chinese imports took effect on Friday, ratcheting up already heightened tensions between the two sides, with Beijing swiftly announcing it will take necessary countermeasures to safeguard the interests of its people. [File Photo: IC]

The list of Chinese products targeted with US tariffs is designed to spare consumers, with 99 percent intermediate products and just one percent consumer goods, according to calculations by Reuters.

However, economists say tariffs will raise costs for American businesses, threaten manufacturing jobs, and hurt American consumers in the long run when some of the costs eventually work their way through the supply chain to end consumers.

US companies may end up feeling the pinch of a trade war more intensely than their Chinese competitors, as many international companies route their supply chains through China.

Though economists estimate that the direct impact of the tariffs will be limited, the indirect impact is far more reaching. If things further escalate, the blow could be bigger.

Take a look at how the tariffs will impact the two countries’ economy and jobs.

Here is a look at the estimated impact if the US and China plan to impose a second round of tariffs on 16 billion US dollars' worth of each other's exports. 

How China, US tariffs could impact economic outlook