World After Trump's new tariff threat, China may either have to blink or widen the trade war

02:34  12 july  2018
02:34  12 july  2018 Source:   latimes.com

Largest US business group attacks Trump on tariffs

  Largest US business group attacks Trump on tariffs The U.S. Chamber of Commerce, the nation's largest business group and customarily a close ally of President Donald Trump's Republican Party, is launching a campaign on Monday to oppose Trump's trade tariff policies.With some of America's tightest trading partners imposing retaliatory measures, Trump's approach to tariffs has unsettled financial markets and strained relations between the White House and the Chamber.

President Trump ’ s latest round of tariffs against China , totaling approximately 0 billion, substantially raises the stakes for Beijing and could push the two countries’ trade war into a new phase, beyond the tit-for-tat duties seen so far.

Trump ’ s move comes one day after China issued a bn list of US goods including soybeans and small aircraft for possible tariff hikes. On Wednesday, Trump sought to play down concerns, saying on Twitter: “We are not in a trade war with China , that war was lost many years ago by the foolish, or

Donald Trump, Xi Jinping are posing for a picture: Chinese President Xi Jinping, right, welcomes President Donald Trump at the square outside the east gate of the Great Hall of the People in Beijing on Nov. 9, 2017. © Provided by Xinhua/Sipa USA/TNS Chinese President Xi Jinping, right, welcomes President Donald Trump at the square outside the east gate of the Great Hall of the People in Beijing on Nov. 9, 2017.

DANDONG, China - President Donald Trump's latest threat of tariffs against China, on imports totaling roughly $200 billion, substantially raises the stakes for Beijing and could push the two countries' trade war beyond the tit-for-tat duties seen so far.

China's Commerce Ministry said Wednesday that the nation would act with "necessary counter-measures," but did not say that the government would retaliate in commensurate fashion, as it has promptly done in the past. The pause in brinkmanship reflects the quandary now facing Beijing.

US-China tariffs: 'The first shots to the trade war are about to be fired'

  US-China tariffs: 'The first shots to the trade war are about to be fired' A trade war between the U.S. and China is about to start soon, and there will be probably be “escalation upon escalation,” warned Geoff Raby, Australia’s former ambassador to China. Ahead of the expected Friday implementation of American and Chinese tariffs, Raby told CNBC that “it looks like the first shots to the trade war are about to be fired.”China, for its part, was already calling the tariff threats between Beijing and Washington a "trade war" in June.“I thought that by now a negotiated solution would have been found,” he told CNBC’s Martin Soong, adding that it seems the U.S. has “walked away” from any potential deal.U.

Hours after China ’ s announcement on Wednesday, administration officials sought to calm fears that a trade war was imminent, suggesting that they might not pull the trigger on a plan to impose tariffs on billion in Chinese goods.

So declared Donald Trump a few weeks ago, after announcing tariffs on steel and aluminum. Either way, Trump may have gotten the worst of both worlds: angering countries that should be our friends and establishing a reputation as an untrustworthy ally and trading partner, without even doing much

The new U.S. proposed levies would be on top of 25 percent tariffs that the Trump administration has assessed on $50 billion of Chinese goods, $34 billion of which took effect last Friday. On that day, China fired back with tariffs of the same amount.

But Beijing cannot match the new proposed tariffs because China imported only about $130 billion of products from the U.S. last year. By comparison, the United States imported more than $500 billion of Chinese goods last year.

Lu Xiang, a Beijing-based researcher at the Chinese Academy of Social Sciences, noted that China has previously indicated that it would retaliate in "quality and quantity," suggesting that Beijing could employ a wide range of measures - beyond tariffs - that would hurt American businesses in China, such as tougher inspections on imports and delaying licensing and approvals for mergers.

This American Cargo Ship Is Racing to China to Beat a Huge New Tariff on the Soybeans it's Carrying

  This American Cargo Ship Is Racing to China to Beat a Huge New Tariff on the Soybeans it's Carrying A ship carrying U.S. soybeans is steaming toward northern China in a race to beat a 25 percent tariff. Peak Pegasus is expected to arrive in Dalian on Friday, the same day that China is scheduled to impose tariffs on imports from the U.S., according to shipping data compiled by Bloomberg and a person familiar with the matter. If it arrives as scheduled, it should be able to clear customs before the tariffs are imposed, according to the person, who asked not to be identified because they’re not authorized to speak to the media. Ship-tracking data currently shows it arriving at about 5 p.m. local time.

The announcement came one day after some of Mr. Trump ’ s advisers tried to calm markets and tamp down fears of a trade war between the world’s two largest economies, saying that the tariff threats were the first step in a negotiation process.

Tariffs and protectionism - what do President Trump ' s new policies mean and what will they do? US President Donald Trump reckons trade wars are "good" and easy. That means they might have to put up the prices on their finished products.

"Chinese counter-measures are more than tariffs; it is hard to guess" what they are, Lu said. He added: "China has prepared for the worst."

U.S. companies in China already have reported stalled product approvals, worker visas and licensing applications. A manufacturer that exports vehicles to China recorded a 98 percent jump in random border inspections in recent weeks that put the company behind schedule. And Chinese customs officers ordered a load of U.S. cherries into quarantine for a week in a coastal southeast China province, causing them to spoil.

Robert Lighthizer, the U.S. trade representative, said Tuesday night in announcing the new round of proposed tariffs that the U.S. expects China to stop unfair practices and open its markets to competition.

"Unfortunately, China has not changed its behavior - behavior that puts the future of the U.S. economy at risk," he said. "Rather than address our legitimate concerns, China has begun to retaliate against U.S. products. There is no justification for such action."

U.S. Poised to Publish $200 Billion China Tariff List

  U.S. Poised to Publish $200 Billion China Tariff List President Donald Trump is preparing to release a list of an additional $200 billion in Chinese products to be hit with tariffs, according to two people familiar with the matter. The list could be released as soon as Tuesday, and likely this week, according to the people, who spoke on condition of anonymity because the matter isn’t public. The publication of the list starts a weeks-long process that includes a public-comment period and hearings.Stock futures fell and yields on 10-year Treasuries declined on concern of a widening trade war.

The latest US proposal came after China threatened tariffs on 106 key US products. Not a trade ' war ' but a trade 'dance'. Why China won't baulk at US tariff threat . US trade deficit widens in February.

China is insisting that the parameters of any negotiations be limited, and that the tariff threat be removed before a final deal can be struck. If There’ s a U. S .- China Trade War , China May Have Some ‘Unconventional Weapons’.

The Trump administration's latest move drew opposition from business groups and some Republican lawmakers concerned the tariffs could be a blow to U.S. consumers and damage the economy. Investors also were concerned. The Dow Jones industrial average closed down 219.21 points, or 0.9 percent, at 24,700.45.

Unlike the 25 percent tariffs already in place, the new levies proposed by the U.S. would be at a lower 10 percent rate but hit many household products, such as electronics, appliances, furniture, some apparel and footwear. A nearly 200-page list issued by the U.S. trade representative's office include a wide variety of specific goods, including fish sticks, baseball gloves, handbags, spark plugs, French doors, yarn and ceramic tiles.

The list will be the subject of public hearings Aug. 20 to 23 before a decision is made on enacting the tariffs.

The targeting of consumer goods sparked immediate fire from the National Retail Federation, which called the latest Trump administration plan "a reckless strategy that will boomerang back to harm U.S. families and workers."

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

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

But they seem surprised and confused by Mr. Trump ’ s rapid-fire decisions and trade threats , like the move to impose punitive tariffs For more than two decades, Beijing has watched corporate America make the case for trade with China and one American president after another embrace that agenda.

[Mnuchin says Trump putting trade war with China ‘on hold’]. Time to take the gloves off.” He followed that up with: “Did [the] president just blink ? The Trump administration rolling back its 0 billion tariff threat against China is a good “get” for the Chinese .

Senate Finance Committee Chairman Orrin G. Hatch, R-Utah, also said the new tariff threat "appears reckless" and warned it "falls short of a strategy that will give the administration negotiating leverage with China." Rep. Kevin Brady, R-Texas, chairman of the House Ways and Means Committee, called for Trump and Chinese President Xi Jinping to meet face to face soon to prevent the situation from getting out of control.

"With this announcement, it's clear the escalating trade dispute with China will go one of two ways - a long, multiyear trade war between the two largest economies in the world that engulfs more and more of the globe, or a deliberate decision by President Trump and President XI to meet and begin crafting an agreement that levels the playing field between China and the U.S. for local farmers, workers and businesses," Brady said.

"Despite the serious economic consequences of ever-increasing tariffs, today there are no serious trade discussions occurring between the U.S. and China, no plans for trade negotiations anytime soon, and seemingly little action toward a solution," he said.

In a sign of bipartisan trade frustration, the Senate voted 88-11 Wednesday for a nonbinding resolution that calls on the White House to seek congressional approval before issuing tariffs in the interest of national security. The Trump administration used national security as a reason to put tariffs on steel and aluminum from Canada, Mexico and the European Union this spring.

China vows to fight back as the trade war escalates

  China vows to fight back as the trade war escalates It's now safe to say that a trade war is underway between the United States and China. Following the introduction of reciprocal tariffs on $34 billion of the others imports on Friday, the US, as promised, has announced a new list of 6,000 Chinese goods, totalling $200 billion, that may be hit with additional 10% tariffs by the end of next month.China's Commerce Ministry has vowed to retaliate to the countermove."The Chinese side is shocked by the actions of the US," it said in a statement, according to a translation by Google.

Mr. Trump , who proclaimed this year that “ trade wars are good, and easy to win,” and his advisers may find that extracting concessions from China is much harder than they expected it would be. The trade imbalance between the countries has actually widened since Mr. Trump visited Beijing in

President Donald Trump ratcheted up the trade war rhetoric with China on Thursday evening. This is what a trade war looks like. Trump ' s latest tariff threat was met with criticism from members of his own Republican party.

Beijing may be holding off from retaliating in equal measure to see if the latest tariffs will prompt a strong enough opposition from interest groups to persuade Trump to pull back from his aggressive trade actions against China.

Trump already has imposed levies on Chinese solar panels, steel, aluminum and many machine and industrial parts. They are aimed at pressuring China to make significant changes that would sharply reduce its trade surplus with the U.S. Others in the administration want to press China to halt policies that compel American firms to turn over technologies in order to obtain access to the large Chinese market.

Up to now, however, growing complaints about Trump's broad tariffs from U.S. businesses, associations, lawmakers and even politically powerful constituents such as farmers have not dissuaded the president from following through on his threats.

Trump has promised to impose tariffs on all Chinese imports if Beijing keeps fighting back and does not accede to his demands - something he promised on the campaign trail.

Beijing expressed "shock" at Tuesday's announcement from the White House, but UBS economist Tao Wang said China is increasingly concerned about how far the trade war might go.

"The Chinese government understands that a full-scale trade war does more economic harm to China," she said.

Chinese leaders also may be hoping that global financial markets will send Trump clear signals that will force the president's hand.

But nervous and uneasy as they may be, investors have been unexpectedly restrained in their reaction, thanks in part to strong U.S. economic growth aided by big tax cuts earlier this year.

Dow set to rebound 200 points after snapping 4-day winning streak

  Dow set to rebound 200 points after snapping 4-day winning streak U.S. stock index futures indicated a higher open on Thursday as trade fears declined amid a lack of retaliatory tariffs by China to the latest round of charges by the U.S.Dow Jones Industrial Average futures rose 200 points, indicating a gain of 200.55 points at the open. S&P 500 and Nasdaq 100 futures also pointed to strong opening gains.

“They have all of these unconventional weapons that are not covered by traditional trading rules that could be potent weapons in actually fighting a trade war .” The details of what China might do are speculative. Thus far, China ’ s government has reacted to new tariff actions by the Trump

China responded to Trump ’ s action by announcing tariffs on billion worth of U.S. products, a relatively modest amount. Mr. Song characterized China ’s response as “cautious anger.” That may not last for long, as the trade dispute between Washington and Beijing widens .

Chinese and other Asian stocks retreated Wednesday, and U.S. stocks were down sharply at the open after the White House unveiled the new tariffs. Even so, the Dow Jones industrial average, through Tuesday's close, was essentially unchanged from the start of the year.

One strategy that Beijing wants to undertake to fight back is to enlist the support of other countries, particularly Western allies of the U.S., against what Chinese officials say are Trump's unilateral protectionist moves that threaten not just American and Chinese economies but the entire world, as well as the global trading system.

"We call on the international community to work together to safeguard the rules of free trade and the multilateral trading system, and jointly oppose trade hegemony," China's Commerce Ministry said Wednesday. A spokesman for the ministry said China would file another formal complaint with the World Trade Organization.

The European Union and Canada, America's closest allies, also have struggled with Trump's trade policies. The EU, Canada, Mexico and Japan, among others, protested after the White House slapped tariffs on steel imports from those trading partners.

EU and other analysts doubt that America's allies will line up behind Beijing, given their historically close military relations with the U.S. and the fact that many of those countries also have complained about China's unfair trade practices and policies.

Some experts think that China and the U.S. will soon find it in their mutual interest to return to the negotiating table and resolve the intensifying trade conflict.

"While there is currently frighteningly little bilateral discussion taking place, increased domestic opposition in the U.S. to tariffs would make such talks more likely," Oxford Economics said in a research note.

But "in the absence of such discussions," the note said, "the U.S. and China seem set for a more full-blown trade war, with major economic implications for themselves and the global economy."


(Lee reported from Dandong, China, and Puzzanghera from Washington.)

Visit the Los Angeles Times at www.latimes.com

Ivanka's company could get hit by Trump's China tariffs .
Many of the handbags and shoes made by Ivanka Trump’s clothing and accessories company are made in China and will likely face the new 10 percent tariffs if taxed like other leather bags subject to the new trade penalties, according to the list published by the U.S. Trade Representative earlier this week. Leather handbags, like the Ivanka Trump Tribeca Box Satchel bag in dove that retails for $250, for instance, are made in China and should be subject to the tax, according to the list. © Provided by CNBC Ivanka Trump’s company doesn’t disclose or discuss where it’s products are made.

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