Trump threatens more tariffs against China

21 June 2018, 06:11 | Andres Norman

Scott Sinklier Newscom

Scott Sinklier  Newscom

It could delay or deny licenses that American companies need to operate in China. With both sides upping the ante, the risks of a damaging trade war grew dramatically. Jacob Parker, vice-president of China operations at the US-China Business Council in Beijing, said some companies have reported Beijing is meeting with Chinese businesses to discuss shifting contracts for US goods and services to suppliers from Europe or Japan, or to local Chinese firms.

Global markets plunged Tuesday after President Donald Trump threatened tariffs on an additional $200 billion worth of Chinese imports.

Tom Orlik, chief economist at Bloomberg Economics, said that in the event that China's exports to the US weaken in the face of tariffs, the government would likely seek to offset the growth impact with a combination of subsidies to support domestic demand and higher infrastructure investment. Last week, the White House introduced 25-percent tariffs targeting $50 billion of Chinese imports to the country.

He also threatened tariffs on another US$200 billion of Chinese products should Beijing hit back again, bringing to US$450 billion the potential amount of Chinese exports that could be targeted. "The nation's worldwide trade deficit in goods and services decreased to $46.2 billion in April from $47.2 billion in March (revised), as exports increased and imports decreased", the U.S. Census Bureau reported recently. Additionally, Liam Fox, the UK's global trade secretary has called on nations to deter from using tariffs and other similar measures as the first response when faced by trade disputes.

"Rather than altering those practices, it is now threatening United States companies, workers, and farmers who have done nothing wrong".

US stock markets fell sharply Tuesday, with investors increasingly nervous about the impact of the escalating fight.

The Dow Jones Industrial Average .DJI fell 287.26 points, or 1.15 percent, to 24,700.21, the S&P 500 .SPX lost 11.18 points, or 0.40 percent, to 2,762.57 and the Nasdaq Composite .IXIC dropped 21.44 points, or 0.28 percent, to 7,725.59. Aerospace giant Boeing fell 3.4 percent and DowDuPont slipped 3.3 percent.

U.S. President Donald Trump launched another trade tirade against Canadians, accusing them Tuesday of sneaking their American shopping back home - all because of what he calls "massive" tariffs on American goods.

Let's remember this is a self-created crisis based on Trump's misguided notion that trade deficits mean we are losing.

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"None of these efforts by the president and his team have resulted in any progress on the two core issues facing the U.S".

"The actions President Trump has taken are purely defensive in nature", he said, asserting that "China does have much more to lose" because it sells so much more to the US than it buys.

The moves could start to meaningfully slow USA growth, economists warn.

Beijing responded by announcing that it would impose a similar tax on 659 United States products also worth $50bn and that includes agricultural and marine products as well as cars. "Canadians have no real reason to "smuggle" their shoes because their government is already helping lower their costs through proper trade deals". A punitive duty the Trump administration applied to lumber imports from Canada has raised the price of a new home by $9,000, according to the National Association of Home Builders. Numerous new tariffs target Chinese tech products used in the auto industry and robotics.

US companies have an increasingly sizable stake in the fast-growing Chinese market.

President Donald Trump on Tuesday claimed that Canada's tariffs are so high that its citizens are smuggling goods en masse from the USA to avoid the import fees. The White House is finalizing a list of $16 billion in additional goods it will sanction later.

China has accused the United States of "extreme pressure and blackmailing" and vowed to retaliate, and financial markets have been hit hard by the escalating trade dispute. Soybeans are on the list - a direct shot at a swath of Trump supporters in the American heartland. And it has launched an investigation into whether tariffs should be slapped on cars and light trucks entering the US using the same national security clause. Earlier this month, that measure was extended to some of the US' traditional allies - the EU, Canada and Mexico.

Apple could be one of the biggest losers in a trade war between the United States and China.

Trump has persistently slammed Chinese trade practices, calling them unfair.

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