Trump’s tariffs could deliver sizable hit to China’s economy

Ivan Schwartz
June 20, 2018

WASHINGTON/BEIJING-China has underestimated U.S. President Donald Trump's resolve to impose more tariffs unless it changes its "predatory" trade practices, a White House trade adviser said on Tuesday, as Trump greatly expanded the amount of Chinese imports possibly facing new duties.

The US says the new tariffs, which would be set at a rate of 10 percent, are in response to tariffs from China last week on $34 billion in US goods at a 25 percent rate.

Trump, pursuing his "America First" policy, has been insisting that China has been unfairly benefitting from a massive trade imbalance with the U.S., now estimated to be Dollars 376 billion.

It was retaliation, Trump said, for China's decision to raise tariffs on US$50 billion in United States goods, which came after Trump announced similar tariffs on Chinese goods on Friday.

"The US has totally ignored the fact that China already agreed to purchase more US products and pledged to further expand market access for global enterprises", Sang said.

House Freedom Caucus founder Jim Jordan (R-Ohio) told Bloomberg that he thinks "most Americans are willing to give this president some latitude to get the best kind of trade deal that benefits the United States", adding, "I have concerns about tariffs in general".

Even if Americans don't buy these items directly, they could still feel the impact as U.S. companies raise their prices to help them pay for more expensive machines and industrial goods.

A paper published by Canadian think tank the CD Howe Institute suggests that Mr Trump's threats are having an effect on USA manufacturing by using "uncertainty as a new weapon in trade protection". -China trade spat and as base metal prices slid.

"Rather than altering those practices, it is now threatening United States companies, workers, and farmers who have done nothing wrong", Trump said. The views expressed therein are not necessarily those of stlucianewsonline.com, its sponsors or advertisers.

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The US, the world's largest economy, has a trade deficit of United States dollars 376 billion with China, the world's second largest economy.

Trump has raised trade tensions on other fronts as well.

"If the U.S. loses its senses and publishes a new list, China will be forced to take comprehensive measures that are both strong in quantity and gravity and will fight back", it read.

"That would lift to 10 per cent if Mr Trump followed through with his threats", Dr Oliver said.

Mr Trump has threatened to put tariffs on an extra $200bn (£141bn) of Chinese goods, sparking fears of a trade war.

Beijing responded by saying it would hit 659 United States goods worth $50bn with a similar tax.

As Louis Kuijs of Oxford Economics notes, a large share of China's exports are for USA companies that sell products here at home.

"Most damaging for businesses and investment is perhaps rising uncertainty caused by lasting trade disputes, which could delay or significantly change business and investment decisions", warned economists at UBS. -China Business Council. Parker suggested that such steps might include delaying or denying licenses required by USA companies in China.

Kim briefed Chinese President Xi Jinping on his recent talks with Trump in Singapore, underscoring China's role in the effort to unwind North Korea's nuclear program.

Other reports by GizPress

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