RICHMOND, VA (WWBT) - Tensions continue to rise between two of the world’s largest economies: the United States and China – perhaps the first steps to a trade war.
Economist and financial expert Carl Carlson, CEO of Carlson Financial, says it may not be as ominous as it sounds.
“Trade war becomes a bit of a bluffing game. Who can bluff bigger? Who can throw these tariffs on and then match that?” Carlson said.
Tariffs on Chinese goods put in place by President Donald Trump went into effect last Friday, increasing the original rate of 10% to 25%, which impacts about $200 billion worth of goods, ranging from foods to car parts.
Despite that, Carlson says it doesn’t necessarily mean you have to tighten your budget just yet.
“If they can get these worked out in the next month or so, then I don’t think it’s going to have a big impact on the consumer.”
He adds that tariff tiffs between world leaders are not a new thing, especially in the U.S.
“President Obama put on tariffs, and sizable ones like this, but only for short term. George Bush did. So this isn’t something that’s just way out of left field,” he said.
Still, there were still some entities within the country who felt the effects; the Dow Jones, for example, dropped more than 500 points Monday.
“The stock market doesn’t like uncertainty. The market usually overreacts both ways,” Carlson said, adding that it could easily pick up again.
Carlson adds that while the list of tariffed items is quite large, the potential price increases on goods shouldn’t be too drastic.
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