Offbeat Trade war: American autos look to be hit the most by both US and China tariffs

12:26  14 september  2018
12:26  14 september  2018 Source:   cnbc.com

Trump imposes tariffs on $200B more of Chinese goods

  Trump imposes tariffs on $200B more of Chinese goods The Trump administration is imposing tariffs on $200 billion more in Chinese goods next week, escalating a trade war between the world's two biggest economies and raising prices on a range of consumer goods from handbags to bicycle tires. The tariffs will start at 10 percent and rise to 25 percent starting in 2019.The tariffs will start at 10 percent and rise to 25 percent starting Jan. 1.

U.S. automakers in China are feeling the most pain as some American companies are getting hurt by new tariffs from both the White House and Beijing, according to a survey released this week from the American Chamber of Commerce in Shanghai and Beijing-based American Chamber of Commerce in China.

The automobile industry is in the crosshairs of rising trade tensions between the two countries. In July, China raised the tariff on imports of U.S. autos to 40 percent just days after broadly cutting duties on foreign-made vehicles and parts to 15 percent from 25 percent.

China hits back by levying tariffs on $60 billion in US goods

  China hits back by levying tariffs on $60 billion in US goods China will levy tariffs on about $60 billion worth of U.S. goods in retaliation for new U.S tariffs, as previously planned, but has reduced the volume of tariffs that it will collect on the products. The tariff rates will be levied at 5 and 10 percent, instead of the previously proposed rates of 5, 10, 20 and 25 percent, the Finance Ministry said on its website late on Tuesday.China will impose a 10 percent tariff on U.S. products it previously designated for a rate of 20 and 25 percent. Liquefied natural gas (LNG), for example, was previously under the 25 percent tariff category but now will be subject to a tariff of 10 percent.

The move came as both countries implemented tariffs this summer on $50 billion worth of goods from the other. Vehicles and components appeared on both lists. U.S. President Donald Trump administration has also proposed duties on an additional $200 billion worth of Chinese goods, while Beijing is planning counter tariffs on $60 billion worth of U.S. goods.

Industries of U.S. businesses operating in China that are most impacted by initial $50 billion tariffs from both sides

a close up of a device© Provided by CNBC

The initial round of U.S. tariffs has affected 80.5 percent of survey respondents in the automotive industry, and 75 percent say the Chinese duties have hit them. That makes the industry the only one to appear in the ranks of the three or four most impacted by tariffs from both sides.

Trump's tariffs could hit $200 billion of Chinese goods this week

  Trump's tariffs could hit $200 billion of Chinese goods this week The United States could impose tariffs on roughly half of all Chinese goods entering the country by the end of the week. require(["medianetNativeAdOnArticle"], function (medianetNativeAdOnArticle) { medianetNativeAdOnArticle.getMedianetNativeAds(true); }); President Donald Trump's proposed tariffs on $200 billion of Chinese goods could go into effect as soon as Friday when a public comment period on the taxes concludes. It's unclear whether the new tariffs will be set at 10% or 25%.

Visitors look at Ford models at Auto Guangzhou in Guangzhou, China November 17, 2017.© Provided by CNBC Visitors look at Ford models at Auto Guangzhou in Guangzhou, China November 17, 2017. Overall, the survey found more than 60 percent of respondents are affected by the U.S. and Chinese tariffs, and significantly more expect negative impact from the proposed second round of duties.

U.S. companies that have supply chains running through China or that conduct a significant part of their operations there face "dual headwinds" from trade tensions, said Hannah Anderson, global market strategist at J.P. Morgan Asset Management. Such challenges "are especially strong for companies that engage in a high degree of specialization and invest significantly for innovation."

The combined tariffs are reducing profits and increasing manufacturing costs for more than 60 percent of respondents in the automotive industry, the survey found.

As a result of such business pressures, roughly half of respondents in the automotive industry said they are looking to source components or assembly outside of China and the U.S., the survey said. A quarter of companies in the industry are relocating China-based manufacturing to southeast Asia, the report said.

Dow rises 100 points as latest US-China trade barbs are not as bad as feared

  Dow rises 100 points as latest US-China trade barbs are not as bad as feared <p>Stocks opened higher on Tuesday as tech shares climbed, but the gains in the broader market were capped as China retaliates against tariffs slapped by the U.S.</p>The Dow Jones Industrial Average rose 31 points as Chevron and DowDuPont outperformed. The S&P 500 and Nasdaq Composite both gained 0.2 percent.

The survey of more than 430 AmCham China and AmCham Shanghai member companies, including 36 in automotive and transportation, was conducted between Aug. 29 and Sept. 5.

Members of AmCham China include local branches of General Motors, Ford, BMW, Goodyear and Harley-Davidson, according to the chamber's website. AmCham Shanghai does not publicly disclose its membership.

But since companies submitted responses anonymously, it is unclear to what extent high-profile U.S. automakers are affected.

Publicly, Ford said in late August that as a result of potential increases in U.S. tariffs, it has decided not to sell a small Chinese-made vehicle in America.

Earlier in August, Morgan Stanley cut its price target and earnings per share estimates on General Motors due to concerns about a slowdown in the Chinese market.

"If almost a half of American companies anticipate a strong negative impact from the next round of U.S. tariffs, then the U.S. administration will be hurting the companies it should be helping," Eric Zheng, chairman of AmCham Shanghai, said in a statement. "We support President Trump's efforts to reset U.S.-China trade relations, address long-standing inequities and level the playing field. But we can do so through means other than blanket tariffs."

Trump wants $200 billion in China tariffs despite talks, sources say .
President Donald Trump instructed aides on Thursday to proceed with tariffs on about $200 billion more in Chinese products despite his Treasury secretary’s attempt to restart talks with Beijing to resolve the trade war, according to four people familiar with the matter. But an announcement of the new round of tariffs has been delayed as the administration considers revisions based on concerns raised in public comments, the people said. Trump may be running low on products he can target without significant backlash from major U.S. companies and consumers, two of the people said.The threat of fresh tariffs roiled financial markets. U.

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