President Trump has announced Thursday that be the United States will be imposing up to $60 billion dollars in tariffs on Chinese and limited China’s ability to invest in the U.S. technology industry. These trade enforcements are designed to punish China for years of violations of U.S. intellectual property rights, according to the White House. The restrictions on Chinese investment are designed to mimic the restrictions faced by Americans investing in China.

The result is the steepest trade confrontation with China in about 25 years. Soon after the statement was released, the Chinese government threatening to place $3 billion worth of tariffs on U.S. goods.
According to a statement released by China’s Commerce Ministry, China does not want to start a trade war, but they are not afraid of one. They’ll be able to meet any challenge thrown at them with confidence.

As a result of the president’s actions, the stocks were sent to their biggest one-day drop in six weeks, which was then followed by the government finding out that China had treated U.S. companies poorly by forcing them to surrender trade secrets for market access.
The trade barriers are a gamble as no one knows how they will turn out, however, early reviews are not good. According to the Washington Post, on Wall Street the Dow Jones industrial average fell by more than 700 points because investors fear the idea of a trade war between the world’s two largest economies.

China’s already plotting out where to impose tariffs on if this dispute is not solved quickly enough. Meanwhile Trump is gambling on the idea that disrupting the usual approach to China will result in a better deal for American businesses and workers than the existing state of affairs that he blames for the deflated American industry.

The predicted result of these tariffs on China is that many goods prices will rise since a good portion of U.S. stores carry goods made in China. Meaning that Americans will pay more for those goods and this will especially effect low-income families who often try to buy the cheapest products, which more often than not are from China. According to the Tax Foundation, the tariffs on China would cancel out about 20 percent of the benefits of the GOP tax cuts.

The only thing left to do is to see how the president and China play it out from here.