The study pertaining to the trade game played by both the countries reveals that Nash equilibrium thus suggesting trade wars as an industry norm. As both countries imposing tariffs this means the trade could go on a while for long time may be decade.

The US is considering 25% tariffs on an additional $100bn of Chinese goods, much higher than the 10% it previously indicated it might impose. It would risk further escalating tensions between the US and China which are already mired in a trade war. This was observed in the US trade war tariff on $34 billion worth Chinese goods and the resultant Chinese retaliation on machinery, components and electronics.

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As china may take an action against US companies generate by selling goods domestically in China so they are a potential target. China may impose tariff on US companies which have significant sales and operations there. China could create difficult procedure and addition tax imposed for US companies by slowing down customs clearance for their imports to slow down a firm’s operations. China could focus on domestic growth, by making sure it has the tools to keep the economy growing during tougher times and by expanding its trade and investment relations with other countries


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