Effect of Price Wars on an Individual Country

The United States and China are the latest countries to engage on trade wars. With an expanding trade deficit of about $375 billion by end of 2017, the United States presided has threatened to impose tariffs on about $200 billion of Chinese goods with actual imposition of 25% tariff on $34 billion worth of imports from China. China has retaliated by threatening to impose tariff on about $35 billion of US goods. The economy is likely to experience a reduction in the gross domestic product due to the trade wars and the resultant price wars. The United States has instituted a 25% importation tax on steel products leading to retaliation by China. Trump reacted to China move by suggesting a $ 100 billion of tariffs on products imported from China leading to China move in increasing fees on imported soybeans from America.