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Offbeat China Has Arsenal of Non-Tariff Weapons to Hit Back at Trump

08:52  11 july  2018
08:52  11 july  2018 Source:   bloomberg.com

Auto Makers in the U.S. Brace for Additional Tariff From China

  Auto Makers in the U.S. Brace for Additional Tariff From China Amid escalating trade tensions, Beijing plans to slap an extra 25% tariff on U.S. auto imports this week. Ford and Tesla are among the auto makers that stand to be affected the most.Ford Motor Co. and Tesla Inc., as well as Germany’s BMW AG and Mercedes-Benz maker Daimler AG—which build premium sport-utility vehicles in the U.S. and ship them to China—stand to suffer the most. They will be forced to charge consumers more, or absorb the added costs, as their rivals take advantage of the reduced tariffs to lower prices.

Donald Trump ’s threat to impose tariffs on an additional 0 billion of imported Chinese goods could see China retaliate with a wide range of non - tariff China has used these tactics before, notably against South Korea and Japan during previous political spats, with carmakers from the two nations

China Has Arsenal of Non - Tariff Weapons to Hit Back at Trump . Fresh U.S. tariffs would almost certainly prompt retaliation at a time when the Trump administration is seeking Beijing’s help reining in North Korea’s nuclear- weapons program.

A worker walks past containers stacked at the Yangshan Deep Water Port in Shanghai, China, on Tuesday, July 10, 2018. China told companies to boost imports of goods from soybeans to seafood and automobiles from countries other than the U.S. after trade tensions between the world's two biggest economies escalated into a tariff war last week.: Yangshan Free Trade Port as US-China Trade Conflict Escalates © Bloomberg Yangshan Free Trade Port as US-China Trade Conflict Escalates

Donald Trump’s threat to impose tariffs on an additional $200 billion of imported Chinese goods could see China retaliate with a wide range of non-tariff barriers.

Because China only imports around $130 billion worth of goods from the U.S., its ability to match the tariffs dollar-for-dollar is limited. The U.S. imported $505 billion of goods from China last year.

Upping the ante: Read more on Trump’s latest tariff threat.

While China may jack up existing tariffs beyond the 25 percent level imposed so far, it could also inflict significant pain by increasing regulatory oversight of American companies, slowing down approvals processes, canceling orders for U.S. goods or encouraging consumer boycotts.

Flake hits Trump over criticism of EU: 'We need our allies with us'

  Flake hits Trump over criticism of EU: 'We need our allies with us' “This is so wrong, Mr. President.”"This is so wrong, Mr. President. When we confront China on unfair trade practices, we need our allies, especially those in the EU, with us, not against us," Flake tweeted.

Trump imposes bn in tariffs on Chinese imports, accusing Beijing of intellectual-property theft. China immediately hit back , announcing that it plans to impose tariffs on US goods, which, last year, had an import value of billion.

China proposed tariffs on billion worth of American fruit, pork, wine and other goods, striking back just hours after President Trump ’s announcement. “The U.S. has unsheathed its sword after an extended period of saber rattling and the Chinese are now unsheathing their weapons .

A truck transports an A.P. Moller-Maersk A/S shipping container at the Yangshan Deep Water Port in Shanghai, China, on Tuesday, July 10, 2018. China told companies to boost imports of goods from soybeans to seafood and automobiles from countries other than the U.S. after trade tensions between the world's two biggest economies escalated into a tariff war last week.: Yangshan Free Trade Port as US-China Trade Conflict Escalates © Bloomberg Yangshan Free Trade Port as US-China Trade Conflict Escalates Big American companies including Walmart Inc. and General Motors Co. host large operations in China and have plans for expansion that could be stymied. China has used these tactics before, notably against South Korea and Japan during previous political spats, with carmakers from the two nations among the victims.

QuickTake: Can the U.S. win a trade war with China?

One example: Japanese automakers took a major hit in their China sales in 2012 after the fight over disputed islands in the East China Sea worsened. Another: China put a huge a dent in tourism in South Korea by banning package tours in 2017 amid a dispute over a missile shield.

Then there’s the currency. China has pleased trading partners in recent times by allowing greater appreciation of the yuan, but there is no guarantee it will stick to this. The yuan is the worst-performing currency in Asia since mid-June, sliding more than 3 percent

And of course there’s also the "nuclear option." While it seems unlikely as China would also suffer greatly, it could offload some of its huge hoard of U.S. Treasuries.

Unless the U.S. and China reach a compromise, the trade war between the world’s two biggest economies looks to be headed for a new level.

To contact the reporter on this story: Enda Curran in Hong Kong at ecurran8@bloomberg.net

To contact the editors responsible for this story: Malcolm Scott at mscott23@bloomberg.net, Brett Miller, Jeffrey Black

©2018 Bloomberg L.P.

4 powerful weapons China has in its arsenal to win the US-China trade war .
China has powerful non-tariff measures it can use to crush America — from cashing out its $1 trillion hoard of U.S. Treasury bonds to devaluing the yuan. These are measures that could destabilize the U.S. economy.Load Error

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