U.S. 'firing at itself' with trade measures: China

11 July, 2018, 20:30 | Author: Eric Barnett
  • GETTYChina's tariff will hit the US first

Experts are of the opinion that this trade war could push the global economy into chaos.

The dollar and United States treasuries have also been sensitive. American companies that do a lot of business there have seen steep drops in their stock prices in the past few weeks.

When your entire economy is heavily dependent on trade, an overall slowdown in global commerce caused by tit-for-tat import taxes provokes fear and undermines confidence. By one measure, business confidence has fallen in six of the past seven months in Germany, where exports are nearly half of annual economic output.

Two of the largest economies in the world have descended into a trade war, after China followed up on its threat to retaliate against the $34bn (£25.7bn) U.S. tariffs.

Consumer Technology Association: "While President Trump says his trade policy is meant to punish China, the numbers show that, in reality, USA businesses, workers and consumers will pay the price under this policy", said Sage Chandler, the group's vice president for worldwide trade.

A China central bank adviser said the planned United States import tariffs on $50 billion worth of Chinese goods - $34 billion plus a planned follow-on list worth $16 billion - will cut China's economic growth by 0.2 percentage points, although the overall impact would be limited, the official Xinhua news agency reported Friday.

Another official described the dispute between Trump and Western allies at the Group of Seven summit last month as a gift to Beijing because it showed European leaders losing a long-time ally, at least in trade policy.

Growth a year ago was the strongest in a decade, since before the global financial crisis.

The American Soybean Association (ASA) said in a statement that soybean farmers "rely heavily" on exports to China, and said that they lobbied Trump to reconsider the tariffs.

It added that instead of "serving the interests of U.S. companies and people, the move will prove to be counter-productive and damaging".

Tech, industrial, and manufacturing companies are likely to be the biggest victim of the trade war between US and China. Trump has threatened to hit back with vehicle tariffs of 20%, which would be highly damaging for the German auto industry. "Simply put, the U.S.is opening fire on the whole world, and also firing at itself", Gao said.

But the list was pared down to 818 product categories worth more than $32 billion after U.S. companies requested exemptions for key imports. Of those, 81,000 - worth $2.37 billion - went to China. Mary Lovely, economics professor at Syracuse University, says that roughly 60 percent of U.S. The tariffs were originally announced in March, but a series of procedural delays and trade negotiations pushed back implementation to Friday.

Even if the overall effect is to harm growth, there could be benefits for some European companies and sectors. He also acknowledged the multi-hundred billion dollar US trade deficit with China. Second, the U.S. is pursuing trade wars on multiple fronts, extending the skirmish against its ostensible allies like Canada and the EU. By contrast, previous year tariffs accounted for only about 1 percent of federal revenue. Volkswagen stocks added 4.5 percent.

The head of the Asia-Pacific Committee of German Business (APA), Hubert Lienhard, said that in the face of a growing protectionist agenda in the United States, a joint German-Chinese message to the White House "could be one the of things emerging from today's government consultations".

Oil prices were supported as larger-than-expected fall in USA stockpiles data from the American Petroleum Institute confounded worries about supply shortage. China retaliated with very targeted tariffs on products and industries associated with Trump's support base. The additional US goods to China could come at the expense of European competitors. Because products that are made in China - from Apple products to Nike ones - are going to get expensive, and be more expensive on the shelves of Walmart for everyday American consumers. China's imports of American oil have surged over the past year and a half, climbing from $100 million per month at the beginning of 2017 to almost $1 billion per month.


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