The Biden administration's tariffs and new tech restrictions on China could cause some blowback to the U.S. economy as Beijing grapples with a serious slowdown.
After barely rising for several months, consumer prices in July actually fell by 0.3% in China, a scenario known as deflation that showed the Chinese economy is sputtering as demand falls. Additionally, gross domestic product growth is slowing and expected to slow after years of breakneck growth, something that has broad economic implications beyond just Asia.The fact that China is experiencing a slowdown will have a direct effect on the U.S.
Adding to Beijing’s economic woes, Chinese manufacturing activity has contracted recently, China’s factory orders are down, domestic travel spending in China is lower, and there is an overall drag on consumption across China. “And this construction market and mortgage market and housing market has not recovered. If anything, it looks bad,” Rehman said.
China answered by saying it has “serious concern[s]” about the move and “reserves the right to take measures” in response. China is also the world’s largest importer and consumer of U.S. agricultural products, and if demand for those declines with Beijing’s economy, so does the U.S. agricultural sector. That means lost jobs here in the U.S. in farming and agriculture.
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