Trump could still slap tariffs on China after signing 'phase one' trade deal, expert warns
China would have to buy a "crazy amount" of U.S. goods and services to fulfill its commitments in the deal, said Deborah Elms, executive director of Asian Trade Centre.That's especially the case when the deal — expected to be signed in Washington on Wednesday — would involve Beijingincreasing its imports of U.S. goods and services by at least $200 billion over two years, said Deborah Elms, executive director at consultancy Asian Trade Centre.
China ’s export juggernaut last year showed it can be nimble too, quickly diversifying into new markets to cushion the impact of Donald Trump ’ s tariff onslaught. China shifted from a billion deficit with the rest of Asia at the end of 2018 to a surplus of about billion last year, according to calculations
U. S . President Donald Trump is pushing his trade conflict with China toward a point where neither side can back down. Yet matching the latest U. S . barrage would force China to either levy much higher tariffs or take more disruptive steps like canceling purchase orders, encouraging consumer boycotts
China’s export juggernaut last year showed it can be nimble too, quickly diversifying into new markets to cushion the impact of Donald Trump’s tariff onslaught.
That’s the key trend seen in China’s 2019 trade data published Tuesday, which show exports to the U.S. plunged 12.5% even as overall shipments rose 0.5%. The trade balance tells a similar story, with China’s surplus with the U.S. dropping 8.5% to almost $296 billion even as its overall surplus rose more than 20% to about $422 billion.
The Phase One trade truce due to be signed by the two nations in Washington Wednesday may bring only a temporary respite as deep divisions over issues from subsidies to technological dominance persist. That raises the question of whether China can continue offsetting the impact of Trump’s tariffs as uncertainty threatens to undercut its global supply chain dominance.
Trump’s Trade Deal ‘In the Bag,’ China Hawk Peter Navarro Says
The White House’s leading China hawk, trade adviser Peter Navarro, said Monday that a preliminary trade deal with Beijing is completed. “That’s a done deal, put that one in the bag,” Navarro said on Fox News. He declined to confirm a report by the South China Morning Post that Chinese emissaries led by Vice Premier Liu He will travel to Washington this weekend to sign the accord.Navarro’s affirmation for what the White House has called a “phase-one” trade deal indicates President Donald Trump doesn’t face pressure from his right to negotiate more favorable terms for the U.S.
Tariffs on farming and manufacturing could hit battleground states such as Iowa, Illinois and Minnesota hard but experts predict a deal.
China responded to Trump ’ s action by announcing tariffs on billion worth of U.S. products, a relatively modest amount. Beijing said it would challenge the penalties at the World Trade Organization, and would carry out its trade restrictions in accordance with W.T.O. rules.
“The trade tension between China and the U.S. led primarily to a redirection of trade flows,” said Frederic Neumann, co-head of Asian economics research at HSBC Holdings Plc in Hong Kong. “The Phase One deal in itself may not lead to a full snap-back in global trade, with lingering policy uncertainty continuing to weigh on corporate spending.”
China is set to commit to targets already stated by the U.S., and buy about $200 billion more U.S. agriculture, energy, manufactured goods and services over the next two years in a phase-one trade deal, according to people familiar with the matter. That includes about $50 billion in oil and gas, said the people, who asked not to be named discussing the deal which hasn’t been made public. Earlier Tuesday,and reported differing sets of numbers for the purchase commitments in the trade deal.
China's 2019 economic growth weakens amid trade war
BEIJING — China’s economic growth sank to a new multi-decade low in 2019 as Beijing fought a tariff war with Washington, but forecasters said a U.S.-Chinese trade truce might help to revive consumer and business activity. The world’s second-largest economy grew by 6.1%, down from 2018’s 6.6%, already the lowest since 1990, government data showed Friday. Growth in the three months ending in December held steady at the previous quarter’s level of 6% over a year earlier.Business sentiment received a boost from Wednesday's signing of an interim deal in the costly war over Beijing's technology ambitions and trade surplus.
President Trump threatened China with another round of punishing tariffs on Friday, saying he Still, Mr. Trump said that China was a cut above the rest of America’ s trading partners when it came For now, talks between the world ’ s two largest economies remain stalled. “ Trump has a strong incentive
China proposed tariffs on billion worth of American fruit, pork, wine and other goods, striking back just hours after President Trump ’ s announcement. In announcing the planned tariffs , the Commerce Ministry said China would also “take legal action within the framework of the World Trade
Amid the ratcheting-up tariffs, China’s exporters wasted no time finding alternative markets and by year end shipments to the Association of Southeast Asian Nations had surged almost 13% while those to the U.K. rose 10%. So effective was this strategy that China’s share of global exports held firm through the first three quarters.
China’s December tradeshowed both import and export growth exceeded expectations. Exports rose 7.6% while imports surged 16.3%.
China shifted from a $5 billion deficit with the rest of Asia at the end of 2018 to a surplus of about $67 billion last year, according to calculations by Christopher Balding, an associate professor at Fulbright University in Vietnam’s Ho Chi Minh City.
“This swing in economic fortunes will change the dynamics for many countries of dealing with China,” he says. “Whatever its faults, the United States’ willingness to import a lot more than it exported to most countries smoothed over many problems.”
Trump says China trade deal may be signed shortly after January 15
Trump says China trade deal may be signed shortly after January 15In an interview with the ABC TV affiliate in Toledo, Ohio, Trump said: "We're going to be signing on January 15th - I think it will be January 15th, but shortly thereafter, but I think January 15th - a big deal with China.
We would probably be kidding ourselves if we treated President Trump ’ s imposition of sweeping new tariffs on China as motivated by some grand ideology or seismic shift in a War of Ideas. Even if his advisers might throw around names like Thucydides
Rest of . the world . 47. 2. India. Rest of . Instead, to hit China , the Trump administration must go much broader with its tariffs . While details are scant and the focus could change, the measures would hit steel from countries around the world , including from American allies like South Korea and Canada.
China’s exporters aren’t out of the woods yet either. Tariffs remain on both Chinese and U.S. goods, and even after the trade deal is signed, the U.S. will be imposing tariffs that are 14.4 percentage points higher on Chinese imports than before the trade war erupted, according to JP Morgan.
It’s likely that bilateral trade will stay depressed for years with a significant risk of decoupling, and could drop as much as 40%, says Adam Slater, lead economist at Oxford Economics Ltd. in London.
The real impact on China is the coming diversification of supply chains, not just away from China but from over-reliance on any single supplier, says Pauline Loong, managing director at research company Asia Analytica in Hong Kong.
“Recalibrating supply chains takes time,” she says. “So the longer term impact on China is more serious than it may appear right now.”
(Updates to include China purchase committments in fifth paragraph)
--With assistance from Jenny Leonard, Sharon Chen and Steven Yang.
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Oil drops on concerns that U.S.-China trade deal may not stoke demand .
Oil drops on concerns that U.S.-China trade deal may not stoke demandSINGAPORE (Reuters) - Oil prices slipped on Wednesday on concerns that the pending Phase 1 trade deal between the United States and China, the world's biggest oil users, may not boost demand as the U.S. intends to keep tariffs on Chinese goods until a second phase.