Technology: China Has a $3.65 Trillion War Chest to Counter U.S. Tariffs - PressFrom - Canada

TechnologyChina Has a $3.65 Trillion War Chest to Counter U.S. Tariffs

12:30  16 may  2019
12:30  16 may  2019 Source:

Ottawa considering new retaliation to end U.S. tariff fight, source says

Ottawa considering new retaliation to end U.S. tariff fight, source says Canada is considering new ways to retaliate against the United States in the hopes of getting steel and aluminium tariffs lifted.

China ' s retaliatory tariffs on US goods of the same scale kicked in at 12:01 pm on Friday in Beijing, after the US fired the first The trade war could have equally important effects on the trillion worth of goods that the country sells to the rest of “ China and the U . S . definitely have ways of resolving it.

“ China ’ s countermeasures have shown our determination to safeguard the multilateral trade system.” The latest U . S . list of 3 ,805 product categories Tariff increases already in place have disrupted trade in American soybeans and Chinese medical equipment. That has sent shockwaves through other

China Has a $3.65 Trillion War Chest to Counter U.S. Tariffs© Drew Angerer/Getty Images Stacks of shipping containers sit along the dock at the New York Container Terminal (formerly known as Howland Hook Marine Terminal) in Staten Island as seen from Elizabeth, New Jersey, May 7, 2019.

(Bloomberg) -- Beijing’s main defense against trade-war fallout this year is more likely to come from the finance ministry than the central bank, no matter what President Donald Trump says.

If tariffs begin to really hurt China’s growth this year, there’s plenty of direct fiscal firepower left to stoke the economy before the People’s Bank of China would have to cut interest rates, according to an analysis of government spending by Bloomberg. Data released Wednesday showed an across-the-board slowdown in April.

Goldman Sachs: Here's what could happen next with the US-China trade war

Goldman Sachs: Here's what could happen next with the US-China trade war Goldman Sachs said chances of a successful deal between the U.S. and China are now lower, but suggested that an increase in tariffs could still be avoided — depending on whether the Chinese bail on their meeting with U.S. negotiators this week. Referring to Trump's latest gambit, Goldman economists said: "This represents a shift from the optimistic statements from US officials over the last few weeks and suggests that the probability of a near-term agreement is at least slightly lower than it seemed to be recently." U.S.

It says the US tariffs on Chinese goods will remain unchanged for 90 days, but warns: "If at the end of this period of time, the parties are unable According to the US , China has also signalled it will allow a tie-up between two major semiconductor manufacturers which Chinese regulators have been blocking.

SHANGHAI — China hit back at the United States on Wednesday with proposed tariffs on billion worth of American soybeans, cars, chemicals and other goods, in a move likely to stoke fears that the countries’ escalating confrontation could become an all-out trade war.

Central and local authorities in China have at least 25.1 trillion yuan ($3.65 trillion) unspent in their budgets this year, data compiled using official budget plans show. That’s two trillion yuan more than the ammunition China had in the same period last year -- and about equivalent to the entire annual output of Germany.

“Chinese leaders will be able to better utilize different kinds of policy tools than their U.S. counterparts if the trade war persists, and that’s where China’s confidence comes from,” said Serena Zhou, an economist at Mizuho Securities Asia Ltd in Hong Kong. “From monetary policy and fiscal policy to the dominant role of the state-owned enterprises, China’s control on the economy is obviously stronger than the U.S.,” she said.

Trudeau spoke to Trump about Canadians detained in China: Ottawa

Trudeau spoke to Trump about Canadians detained in China: Ottawa Trudeau spoke to Trump about Canadians detained in China: Ottawa

The tariffs on China by the Trump administration shift what has primarily been a war of words between Washington and Beijing into a full-blown trade Employees at a manufacturing plant in McKeesport, Pa., earlier this year. China said it will hit back by imposing its own tariffs on United States goods.

China has powerful non- tariff measures it can use to crush America — from cashing out its trillion hoard of U . S . Treasury bonds to devaluing the yuan. Last week the U . S . launched a trade war with China revealing a list of tariffs it could slap on 0 billion worth of Chinese goods.

Indeed, PBOC Governor Yi Gang has spent the last year saying he wants to avoid a “flood” of stimulus, pushing back against expectations of benchmark interest-rate cuts as he seeks to curb market bubbles and keep a lid on debt growth.

That said, economists from Morgan Stanley and China International Capital Corporation to Macquarie Securities expect further cuts to the proportion of deposits banks are forced to lock away, as authorities look to keep the credit taps flowing.

The authorities have ramped up fiscal expenditure earlier this year than they usually do, with the most obvious front-loading coming in infrastructure-related areas such as transportation and environmental protection.

Even so, more than two thirds of the total “augmented” budget -- the general public budget, the government fund budget and special government bonds together -- remains unused.

China Is Armed With Powerful Market Weapons in Duel With Trump

China Is Armed With Powerful Market Weapons in Duel With Trump China has a powerful financial-market arsenal for its trade tussle with America, including a hoard of Treasuries and its currency. But using those weapons is not without cost. Beijing has vowed to retaliate after U.S. President Donald Trump followed through with his threat to raise tariffs Friday on $200 billion of Chinese imports to 25% from 10% percent. But simply responding with its own tit-for-tat tariffs isn’t China’s most likely move, said Brad Setser, a former Treasury official who’s now a senior fellow for international economics at the Council on Foreign Relations. “Matching the U.S. dollar-for-dollar on the U.S.

China strikes back at up to billion in US tariffs with only $ 3 billion of its own. Published Thu, Mar 22 2018 10:52 PM EDTUpdated Fri, Mar 23 2018 8:22 AM EDT. "The Chinese recognize that everyone has a lot to learn if the U . S . and China move into a trade war," said Stratford, who now is managing

China has vowed to immediately retaliate with its own round of billion in tariffs on U . S . products. Trump threatening to impose 0B in new tariffs on China . That' s because the hundreds of Chinese components that the Trump administration aims to penalize are used to make everything

China Has a $3.65 Trillion War Chest to Counter U.S. Tariffs© Bloomberg Not Even Halfway

Of course, merely increasing this year’s spending isn’t the limit of fiscal action if the trade war blows out and impacts economic growth significantly. Officials can support growth by selling more debt via local government financing vehicles and policy banks, though that begins to run counter to the goal of cleaning up debt.

“China may step up its pro-growth policies if the U.S. imposes additional tariffs on $300 billion worth of Chinese goods” and the preferable policy options include expansionary fiscal policy, such as tax and fee cuts, according to CICC economists.

A severe growth slowdown is likely to produce a “whatever it takes” moment for China’s policy makers. Otherwise, the Communist Party faces failure to meet its long-term growth target, just in time for its centenary in 2021.

Trump’s New Tariff Hit Threatens Xi’s 2020 Economic Growth Goal

For its part, the PBOC has also appeared to be leaning toward an easing bias since this month as trade tensions escalate.

Compared to the room for more fiscal stimulus, the PBOC has less space to maneuver and will likely stick to the “targeted approach” for now. Universal cuts to reserve-requirement ratios and interest rates are however on the table if the economy faces greater challenges, said Wang Yifeng, chief analyst of banking at Everbright Securities Co in Beijing.

Trudeau talks to Trump about blowback from China and ongoing steel tariffs

Trudeau talks to Trump about blowback from China and ongoing steel tariffs Prime Minister Justin Trudeau called U.S. President Donald Trump today, seeking an end to U.S. steel tariffs and asking for additional diplomatic assistance in Canada’s ongoing dispute with China.

Beijing has said it will retaliate in equal measure. U . S . President Donald Trump has threatened to impose Global merchandise exports rose 11 percent in 2017 to .2 trillion , according to the World Trade Counter tariffs by China will hit U . S . agricultural commodities, autos and aquatic products.

China ' s step reflects its diplomatic efforts to counter U . S . pressure in a growing trade dispute. China ' s lopsided trade balance means it will run out of U . S . imports for Chinese leaders have expressed confidence their trillion -a-year economy can survive the tariff war with U . S . President

The central bank has appeared to be more accommodative in open market operations since early May, adding liquidity to stabilize market sentiment. Monetary policy officials also sought to ease investors by saying it has ample policy room and tools to deal with any uncertainties.

“We can’t quantify the impact of the trade war on corporate sentiment, so the real influence may be larger” than what economist estimates suggest, which reinforces the case for more pro-growth policies, Hong-Kong-based Morgan Stanley economist Robin Xing said.

--With assistance from Shuqin Ding.

To contact Bloomberg News staff for this story: Yinan Zhao in Beijing at [email protected];Ling Zeng in Shanghai at [email protected];Heng Xie in Beijing at [email protected]

To contact the editors responsible for this story: Jeffrey Black at [email protected], Brian Swint

For more articles like this, please visit us at

©2019 Bloomberg L.P.

The Trump administration reportedly plans to delay slapping tariffs on autos by up to 6 months.
Auto stocks like Ford and GM rose Wednesday after reports said the Trump administration plans to delay auto tariffs by up to six months.

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