The USTR will accept public comments on the latest round of tariffs and hold hearings on August 20-23 before reaching a decision after August 31, according to a senior US official.
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SUN: But it turns out that through – after rounds of negotiations that have happened between the two governments, Trump is leaving no more space for negotiation, and the trade war is already on.
This creates what at first seems to be a problem for China: Beijing may soon run out of American goods to tax.
Stocks began to be traded lower today as a trade war between the United States and the other major economies became a reality after President Donald Trump unveiled new tariffs on Chinese goods. Since China does not import that much from the United States, then China can double the rate of the tariff if China wants to achieve that equivalent effect. It will have to get creative – and be patient.
The Chinese government, however, called it “totally unacceptable” and said it would take unspecified countermeasures.
Both the yen and the dollar are favored as safe-haven investments, but the strength of the greenback suggests investor faith in the US economy rather than a bid for safety.
ACC does not believe the tariffs will change China’s trading practices. But obviously that’s swamped by the trade in goods. China’s yuan meanwhile dropped 0.45 per cent against the dollar to move back towards an 11-month low plumbed last week.
“Now, we will need to grapple with new tariffs on an additional US$200 billion worth of imports, which are bound to include even more consumer products and everyday essentials”.
There are fears that Beijing could attempt to disrupt operations of American auto makers, retailers and others that see China as a key market.
“American families are the ones being punished”. Such a move could have a materially negative effect on United States stocks, Capital Economics says.
Bloomberg explored a few of China’s options. They criticize Trump’s tactics but share US complaints about Beijing’s industrial policies. In particular, they could target things like USA energy exports. What confuses China the most about Trump’s actions? In particular, if they hit American liquefied natural gas with tariffs, the Chinese could undercut investor plans to build a more robust and long-term domestic infrastructure. “You tax soybean exports at 25 percent, and you have serious damage to U.S. farmers”. But it would definitely mess with America in the short term.
Instead, its heavily regulated economy gives Beijing tools to disrupt operations for American companies. They also hurt American companies.
China has become a key trade partner for US energy exports, and potential tariffs on USA energy goods could hurt USA producers and industries.
“A lot of the components sourced by USA companies are produced by Chinese companies”, he said.
ENERGY: Benchmark U.S. crude fell 1 percent to $73.42 a barrel in NY. They have given no indication when they might meet again. Rising rates would curb inflation and increase the value of the dollar. Before now, the administration had scrupulously avoided slapping tariffs on consumer goods in order to spare US shoppers from direct economic pain. In a statement, it called the US actions “completely unacceptable”. “We can not turn a blind eye to China’s mercantilist trade practices, but this action falls short of a strategy that will give the administration negotiating leverage with China while maintaining the long-term health and prosperity of the American economy”. “If inflation goes up by 1 percent and income and wages don’t, that would be a bigger hit to consumer welfare than these tariffs”.
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“Our president is going to keep fighting for trade deals that are free and fair and reciprocal”, Pence said.
