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We are in a trade war between the world's two largest economies. And that's something that we haven't seen in many, many years in the global economy. And that is something that is going to cast a big shadow over the global economy in the months to come.
The US, at midnight on Friday, a minute after midnight, began imposing a 25% tariff on more than 800 products with an annual trade worth something like $34 billion. And the Chinese immediately responded in kind, different set of products, targeting things like soyabeans and so on. But the fight is joined. We are at war right now.
The reason this matters is that we are in what should otherwise be a healthy global economy. And here is the biggest threat to that healthy growth that we have in the global economy. The concern is that this tit for tat tariff war will start raising costs for US companies, US manufacturers. It will start hurting Chinese manufacturers. We'll start to see some layoffs, or at least a slowdown in investment.
This has real, significant economic consequences. And we heard that from the Federal Reserve this week when they released the minutes of their June meeting and revealed that they were already hearing from businesses that were either pausing or even scaling back investment as a result of Donald Trump's trade policies.
This is going to cast a big shadow. This is a big break, potentially, on the global economy. What happens next, as far as we can tell, is going to be potentially a steady escalation of things. Donald Trump on Thursday, just hours before these tariffs took effect, said he was willing to go up to $500 billion in Chinese imports and slap them with tariffs. And that's significant because the US imported about $505 billion worth of goods from China in 2017.
What Donald Trump is effectively saying is, I'm going to slap tariffs on every little piece and widget that we import from China. And that's a full bore trade war. The Chinese will do the same. They'll find a way to retaliate. And again, that will be very bad for the global economy.
The biggest thing we need to look for now is a way out of this. And I'm not sure that at the White House or in Beijing, they have a clear way out.