Trump & Trade: Feeling the pressure - ING

Ivan Schwartz
September 19, 2018

In a second statement Tuesday morning, China announced it will retaliate with tariffs ranging from 5 to 10 percent on approximately $60 billion worth of USA imports.

The tariffs will place an additional 5-percent in duty on USA products including smaller aircraft, computers and textiles, and an extra 10-percent on goods such as chemicals, meat, wheat and wine.

This second round of tariffs follows on tariffs of 25 percent on $50 billion in Chinese goods that Trump announced on June 15.

"What China does not understand is that these people are great patriots and fully understand that.China has been taking advantage of the United States on Trade for many years", he tweeted.

Beijing has warned that it would hit an additional $60 billion in American products if Trump ordered more tariffs.

"Tariffs have put the United States in a very strong bargaining position, with billions of dollars, and jobs, flowing into our country - and yet cost increases have thus far been nearly unnoticeable", Mr Trump said on Twitter.

Trump has also complained about America's gaping trade deficit - $336 billion previous year - with China, its biggest trading partner. A pair of sources cited by Bloomberg say that when the final list is released on Monday, the product code covering the Apple Watch and AirPods, along with other smartwatches and fitness trackers, will be excluded from that list.

The president said the USA will immediately pursue additional tariffs on another US$267 billion of Chinese imports if Beijing hits back against the US$200 billion round.

China is reviewing plans to send a delegation to Washington for fresh talks in light of the United States action, the South China Morning Post reported on Tuesday, citing a government source in Beijing.

"We stand ready to negotiate with China anytime, if they are willing to engage in serious talks", Kudlow said at the Economic Club of NY. On Wall Street stocks closed lower led by declines in Amazon and Apple amid investor fears the companies could be caught in the middle of a China US trade war. "As such this is a real ratcheting up of trade tensions that certainly heightens the risks for global and United States growth".

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If the business case for new export terminals in the longer look compelling because of tariffs from China, other projects around the world could receive a boost.

"They also know that I am the one that knows how to stop it", he said.

Moorhead said he believed some tech firms, however, are "secretly applauding" the tough stand by Trump because it may over time impact the imbalance in trade between the two countries.

The rates will be levied at 5-10 percent, instead of the previously proposed 5, 10, 20 and 25 percent rates, according to the Chinese finance ministry's website. "But, so far, China has been unwilling to change its practices", including theft and force transfer of technology. But some Democrats, who broadly oppose the president's agenda and are banking on his unpopularity, have adopted critical views of trade agreements and free trade.

This comes just after Mr. Trump order additional tariffs on $200 billion of Chinese imports on Monday that will take effect on Sept 24.

The U.S. duties targeted Chinese goods Washington says have benefited from improper industrial policies.

However, senior administration officials told reporters the initial list announced in July was reduced by 300 product lines in response to 6,000 written comments from consumers and businesses.

In the first two rounds of tariffs, the Trump administration was careful to try to spare consumers from the direct impact of the import taxes.

Mr Trump said in his statement: "We have been very clear about the type of changes that need to be made, and we have given China every opportunity to treat us more fairly".

"In the short term, we will have higher prices and fewer jobs than we would have had otherwise", Sohn said.

Other reports by GizPress

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