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Money There's no end in sight for the US-China trade war because 'both sides are more inclined to elevate tension than blink'

04:31  06 august  2018
04:31  06 august  2018 Source:   businessinsider.com.au

Macquarie outlines the commodities likely to outperform no matter how the trade wars play out

  Macquarie outlines the commodities likely to outperform no matter how the trade wars play out There's no shortage of uncertainty for investors to navigate at present, particularly when it comes to global trade. Will tensions between the United States and other major trading partners erupt into a full-blown trade war, or will that scenario be averted?And how will the Chinese economy fare, particularly at a time when officials are attempting to reduce leverage across its industrial sectors?So much uncertainty, and speculation, but no clear answers as yet.For commodity investors, in particular, this presents a challenge given how crucial global growth is for demand, and prices.

There ' s no end in sight for Trump's trade war with China , because ' both sides are more inclined to elevate tension than blink '. The two sides do not appear to be talking, which raises the chances of a drawn-out trade war . President Donald Trump's trade dispute with China is entering its sixth month

Both sides recently increased tariff threats. Trump threatened to slap 25% tariffs on $ US 200 billion worth of Chinese goods, while China threatened tariffs “ We remain extremely concerned about the potential volatility between now and a breakthrough, especially as both sides are more inclined to

Xi Jinping wearing a suit and tie: US President Donald Trump (L) and Chinese President Xi Jinping at their joint press conference at the Great Hall of the People in Beijing.  © Getty US President Donald Trump (L) and Chinese President Xi Jinping at their joint press conference at the Great Hall of the People in Beijing. President Donald Trump's trade war with China is entering its sixth month, and there are no signs it will end anytime soon.

Both Trump and China continue to issue new threats of tariffs. And negotiations have been scarce, increasing the possibility of a drawn-out fight.

Ed Mills, a policy analyst at Raymond James, said in a note to clients that while the possibility of a breakthrough deal remains, it is unlikely to come without increased trade restrictions.

"We remain extremely concerned about the potential volatility between now and a breakthrough, especially as both sides are more inclined to elevate tension than blink," Mills said.

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  Indian farm product tariffs curbing Australian exports- minister Indian farm product tariffs curbing Australian exports- minister"Australian farm exporters to India have been whacked with a range of new trade distortions over the past year," Ciobo told a grains industry conference in Melbourne.

Both sides recently increased tariff threats. Trump threatened to slap a 25% tariff on 0 billion worth of Chinese goods, while China threatened tariffs on “ We remain extremely concerned about the potential volatility between now and a breakthrough, especially as both sides are more inclined to

“ We remain extremely concerned about the potential volatility between now and a breakthrough, especially as both sides are more inclined to The trade war kicked off in earnest in July when Trump imposed a 25% tariff on billion worth of Chinese imports to the US , prompting China to

New threats

Instead of moving toward any type of resolution, both the US and China have rolled out new threats of tariffs over the past few weeks:

  • The trade war kicked off in earnest in July when Trump imposed a 25% tariff on $US34 billion worth of Chinese imports to the US, prompting China to respond in kind.
  • Trump then threatened to slap a 10% tariff on another $US200 billion worth of Chinese goods, again leading to a counter-threat from Beijing.
  • The action intensified on Thursday, when US Trade Representative Robert Lighthizer announced that Trump instructed the USTR's office to examine the possibility of raising the tariff rate on the $US200 billion worth of Chinese imports to 25%.
  • China then retaliatedwith a threat on Friday to hit $US60 billion worth of US exports to China, with tariffs ranging from 5% to 25%.
  • If China follows through on the threat, nearly 90% of all US goods heading to China will be subject to tariffs.

In addition to the possible second wave of tariffs, the two sides have also been digging in publicly.

Australia, New Zealand dollars stuck in a rut amid global trade tensions

  Australia, New Zealand dollars stuck in a rut amid global trade tensions Australia, New Zealand dollars stuck in a rut amid global trade tensionsLoad Error

Economists warn that a prolonged trade war between China and the US could end up increasing April 4: China rolls out a listof more than 100 US goods worth roughly billion that are subject to SEE ALSO: There ' s no end in sight for Trump's trade war with China , because ' both sides are

for Trump' s trade war with China because ' both sides are more inclined to elevate tension we believe that this Chinese trade fight will last well beyond the midterm elections as the reforms sought of the trade dispute could knock 0.81 percentage points off global gross domestic product Most of the

Larry Kudlow, the president's chief economic adviser, told Bloomberg TV that Trump is not afraid of dragging out the fight with China.

Trade surplus jumps to $1.9 billion as exports surge and imports retreat

  Trade surplus jumps to $1.9 billion as exports surge and imports retreat A strong month of exports from the big resource companies and a slide in imports sees the trade surplus jump by 160 per cent in June.In seasonally adjusted terms the surplus grew by almost 160 per cent over the month from the $725 million recorded in May.

Trade barriers would not only damage both countries but would also disrupt global supply chains So far, China has responded by announcing tariffs on US imports. The next stage would be for the US In other words, the tensions between the US and China could go beyond taxes and directly disrupt

Trump has added to the tension by threatening new tariffs on cars. The US tariffs on China target more than 800 different items, including industrial machinery, medical devices and auto parts. Related: Daimler warns US - China trade war will hit its profits. For the time being , analysts say it' s

"Their economy's weak, their currency is weak, people are leaving the country," Kudlow said. "Don't underestimate President Trump's determination to follow through."

At the same time, China has expressed a willingness to go to the mat over tariffs. The Chinese Ministry of Commerce said Friday that if US continues to "blackmail" China, the conflict will only intensify.

No talks

Kudlow, a former Wall Street economist and CNBC host, told Marketplace's Kai Ryssdal that talks with the Chinese have stalled out.

"Virtually nothing has happened in a trade dialogue with China in a month or six weeks," Kudlow said. "We haven't heard from them."

Kudlow also told reporters on Friday that the administration held a call with China within the past few days involving high-level officials. But multiple reports indicate that prior to the call, there has been almost no dialogue for the past month.

The lack of negotiations is compounded by the fact that Trump and the White House have not articulated clear goals for the trade fight with China.

Mills said all signs point to the trade fight to sticking around for the foreseeable future.

"Regardless of a potential breakthrough, we believe that this Chinese trade fight will last well beyond the midterm elections as the reforms sought by the Trump Administration will be difficult for China to accept and implement." Mills said.

China-US trade war could create global instability, says Cochlear CEO .
The trade war between China and the US is spilling over into a battle over currency and could create global instability, says Cochlear CEO Dig Howitt.The trade war raging between China and the United States is spilling over into a battle over currency and has the potential to create global instability, says Cochlear chief executive Dig Howitt.

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