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Wall-street or War-street: Trade-Wars in the Financial Hub

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Tensions arise as stocks plummet with discord between the U.S. and China. Wall Street, one of the biggest financial hubs of the world, expects the U.S. economy to take more hits with this trade war between both super powers. Analysts and strategists see a general decline in the global economy too—such is the power of these two nations—neither of whom shows any signs of wavering.

What does this mean for the economy?

With no signs of improvement in sight, experts predict an increase in tariffs and taxation—as if the increase from 10% to 25% wasn’t damaging enough—on Chinese goods, in an ongoing effort to prevent Chinese firms from going through with their acquisitions of U.S. firms and property. As a retort, earlier last month, the U.S. blacklisted Huawei, a Chinese telecom firm from acquiring U.S. components. Overall there is a growing aversion to Chinese involvement in the tech sector, which is a fast growing industry across the world. This tussle for power could affect companies working in collaboration, provided that the U.S. is one of the major tech innovators in the world, and China one of the largest producers of tech products.

What will happen to business owners?

This cut off between both countries is detrimental to the efforts of business owners that depended on each other’s efforts and the markets each country provided, which is why it’s equally distressing for Chinese companies to get cut off from Wall Street, the U.S. financial market that has helped them earn billions in the past.

Though political and financial in nature, Wall Street is at risk of becoming a battleground for these state level trade wars. The trickledown effect of which will be suffered by businesses and individuals not just in these countries but the world over, especially the global south.

To add fuel to the fire, there is an aversion and fear of China’s influence in the American stock market, which has led to an escalation of tensions rather than dissipation.

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