Friday, 21 September, 2018

Acadiana soybean farmers brace for worst after China imposes tariffs

U.S. tariffs take effect, China warns of 'counterattack' Trade war erupts as China fights back against US tariffs
Ginger Lawrence | 09 July, 2018, 15:40

Why is the USA imposing tariffs?

"We can probably say that the trade war has officially started", said Chen Feixiang, professor of applied economics at Shanghai Jiaotong University's Antai Colege of Economics and Management.

That factor, combined with estimates that "over $20 billion worth of China-made products being targeted by the US tariffs are actually produced by foreign companies' joint ventures in China" - will make a trade war "difficult for the U.S.to sustain", the economist argued.

"A trade war benefits no one, because it hurts free trade and the multilateral process", Chinese Prime Minister Li Keqiang (李克強) told a summit with 16 EU and Balkan countries in Sofia.

Reprising the tactic he used against steel and aluminum imports, Trump in May ordered the Commerce Department to investigate whether imported vehicles and auto parts pose a threat to US national security that justifies tariffs. It said US companies want fairer treatment but will be hurt by US-Chinese tensions. Asian equities wobbled but also managed to end up.

China's June foreign exchange reserves increased by US$1.51 billion to US$3.112 trillion, according to the Chinese central bank's data, 0.3 per cent more than the level expected in a Bloomberg survey of economists. The negative impact on China's gross domestic product growth - and Chinese consumer prices - is also expected to be minimal. Farmers, we're price takers, not price makers.

"The United States has blatantly violated WTO rules", Lu said. There did not appear to be any direct instructions to hold up cargoes, but some customs departments were waiting for official guidance on imposing added tariffs, the sources said.

"By threatening unilateral action without having any allies and not reducing domestic discord on trade, the Trump administration has invited China to stand tough", said Scott Kennedy, director of the Project on Chinese Business and Political Economy at the Center for Strategic and International Studies.

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"The US has said that it is prepared to put traffis on hundreds of billions of dollars of more goods and China has said it will match that", he added.

Have US trade partners retaliated?

"You have another $16bn in two weeks, and then, as you know, we have $200bn in abeyance and then after the $200bn, we have $300bn in abeyance. Ok? So we have 50 plus 200 plus nearly 300", Trump told reporters aboard Air Force One on Thursday.

The official newspaper China Daily accused the Trump administration of "behaving like a gang of hoodlums" who could do damage to the global economy unless other countries stop them.

"The duties are typical bullying behavior, which will have a serious impact on the global industrial and value chain and pose obstacles to global economic recovery", China's commerce ministry said.

The National Retail Federation: "With tariffs against China taking effect, American consumers are one step closer to feeling the full effects of a trade war", Matthew Shay, president and CEO of The National Retail Federation, said in a statement Friday.

President Trump had earlier imposed a 25 percent tariff on $50 billion of goods imported from China containing industrially significant technology, including those related to the "Made in China 2025" program.

"This is not economic Armageddon".