Tuesday, 25 June, 2019

Trump orders review of $100 billion more in tariffs on China

Men are refelcted in a screen displaying market indices outside a brokerage in Tokyo Trump is raising the stakes in trade war with China, floats the possibility of $100 billion in additional tariffs
Deanna Wagner | 07 April, 2018, 00:33

"We may take a hit and, you know what, ultimately we're going to be much stronger for it".

And Trump responded late Thursday by doubling down - instructing trade officials to consider tariffs on an additional $100 billion in imports.

"We are prepared and have already formulated very detailed countermeasures", Gao Feng, a Commerce Ministry spokesman, stated to reporters at a press conference on Friday.

The spokesman, Gao Feng, said at a news conference: "If the US side announces the list of products for $100 billion in tariffs, the Chinese side has fully prepared and will without hesitation counterattack with great strength".

Trump's surprise directive Thursday came a day after Beijing announced plans to tax $50 billion in American products, including soybeans and small aircraft, in response to a USA move this week to slap tariffs on $50 billion in Chinese imports.

Trump said falling aluminium prices was proof his get-tough trade policies are working in a Twitter message this morning. He tweets, "People are surprised, I'm not!"

"The two biggest categories of US imports from China previous year were communications and computer equipment, totaling $137bn according to US Census data", Reuters reported.

When the European Union was trying earlier this year to avoid USA tariffs, its leaders threatened to strike back by targeting American products including cranberries, orange juice, whiskey and tobacco.

The US and China have complained to the World Trade Organization about each other more than any other countries, with Beijing issuing 11 complaints against its biggest trading partner since joining the WTO in 2001, and Washington making 22 complaints.

The escalating tit-for-tat trade actions between the two economic superpowers have roiled global financial markets, as investors anxious about the impact on world trade and growth, hitting equities, the dollar and a range of riskier assets such as copper and boosting safe-havens such as the Japanese yen and gold. "We don't want a trade war, but we are not afraid of such a war", a spokesperson for the Ministry of Commerce told state-run news agency Xinhua on Friday.

Lighthizer echoed Trump's response to Beijing's retaliation and voiced his support for additional tariffs, calling the measure "appropriate", according to Politico. The administration later stressed that any additional tariffs first would be subject to a 60-day public comment period.

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German police arrested Puigdemont in March while he was crossing into the country from Denmark on his way from Finland to Belgium. Catalan parliament president Roger Torrent described Mr Puigdemont's conditional release as "very good news" on Twitter.

Crude oil prices fell after Trump's latest tariff proposal.

"Imposing tariffs on soybeans looks problematic", said Julian Evans-Pritchard, a China economist at research firm Capital Economics, in a note to clients.

The two biggest categories of US imports from China a year ago were communications and computer equipment, totaling $137 billion according to US Census data. That was in response to Trump's proposed tariffs targeting industries including aerospace, robotics and machinery.

He also blamed what he said was inaction by previous administration on the matter, saying, "we had no choice". "This is business", Navarro said. China is the world's largest exporter of steel and called this a "serious attack" on global trade.

China could also take another page out of the playbook it used on South Korea by making life hard for big US companies operating in its territory.

Analysts at Oxford Economics warned that a full-blown trade war will have damaging consequences.

Brent crude futures fell 98 cents to $67.35 per barrel, while U.S. West Texas Intermediate (WTI) crude futures slid $1.21 to $62.33 a barrel. "We're not quite sure what the long term strategy is". And after a meeting with acting US Secretary of State John Sullivan, Chinese Ambassador to the US Cui Tiankai underscored the need to remain in close communication to restore fairness and balance to economic ties.

Here is an overview of the main products targeted in the escalating trade duel between the world's two top economies. China said that its timing depends on what Trump does.

"We need the U.S. and China to come to the table and identify solutions to these serious problems", he added. China responded by imposing similar measures on $3 billion worth of USA pork, fruit and other items.

Both Trump and Xi have to weigh the political costs of a trade war. In response, China on Sunday slapped tariffs on $3 billion on agricultural products from the US including hog parts, wine, fruit and nuts. Worries about a potential trade war have rippled through farm states, which are a powerful voting bloc in November's congressional elections.

Wei Jianguo, former vice-minister of the commerce ministry, said that China may cut down service trade with the United States in view of the current trade conflict. Even after that, it's not clear when the tariffs would be applied.