Trump sets tariffs on $50 billion in Chinese goods; Beijing strikes back

[rooster59]

Trump sets tariffs on $50 billion in Chinese goods; Beijing strikes back

By David Lawder and Ben Blanchard

 

FILE PHOTO: Shipping containers, including one labelled "China Shipping," are stacked at the Paul W. Conley Container Terminal in Boston, Massachusetts, U.S., May 9, 2018. REUTERS/Brian Snyder/File Photo

 

WASHINGTON/BEIJING (Reuters) - U.S. President Donald Trump said he was pushing ahead with hefty tariffs on $50 billion of Chinese imports on Friday, and the smoldering trade war between the world's two largest economies showed signs of igniting as Beijing immediately vowed to respond in kind.

 

Trump laid out a list of more than 800 strategically important imports from China that would be subject to a 25 percent tariff starting on July 6, including cars, the latest hardline stance on trade by a U.S. president who has already been wrangling with allies.

 

China's Commerce Ministry said it would respond with tariffs "of the same scale and strength" and that any previous trade deals with Trump were "invalid." The official Xinhua news agency said China would impose 25 percent tariffs on 659 U.S. products, ranging from soybeans and autos to seafood.

 

China's retaliation list was increased more than six-fold from a version released in April, but the value was kept at $50 billion, as some high-value items such as commercial aircraft were deleted.

 

Shares of Boeing Co <BA.N>, the single largest U.S. exporter to China, closed down 1.3 percent after paring earlier losses. Caterpillar Inc <CAT.N>, another big exporter to China, ended 2 percent lower.

 

Trump said in a statement that the United States would pursue additional tariffs if China retaliates.

 

Washington and Beijing appeared increasingly headed toward open trade conflict after several rounds of negotiations failed to resolve U.S. complaints over Chinese industrial policies, lack of market access in China and a $375 billion U.S. trade deficit.

 

"These tariffs are essential to preventing further unfair transfers of American technology and intellectual property to China, which will protect American jobs," Trump said.

 

Analysts, however, did not expect the U.S. tariffs to inflict a major wound to China's economy and said the trade dispute likely would continue to fester.

 

TVS SPARED, CHIPS ADDED

 

U.S. Customs and Border Protection will begin collecting tariffs on 818 product categories valued at $34 billion on July 6, the U.S. Trade Representative's office said.

 

The list was slimmed down from a version unveiled in April, dropping Chinese flat-panel television sets, medical breathing devices and oxygen generators and air conditioning parts.

 

The tariffs will still target autos, including those imported by General Motors Co <GM.N> and Volvo, owned by China's Geely Automobile Holdings <0175.HK>, and electric cars.

 

And USTR added tariffs on another 284 product lines, valued at $16 billion, targeting semiconductors, a broad range of electronics and plastics that it said benefited from China's industrial subsidy programs, including the "Made in China 2025" plan, aimed at making China more competitive in key technologies such as robotics and semiconductors.

 

Tariffs on these products will go into effect after a public comment period. A senior Trump administration official told reporters that companies will be able to apply for exclusions for Chinese imports they cannot source elsewhere.

 

Most semiconductor devices imported from China use chips produced in the United States, with low-level assembly and testing work done in China, prompting the Semiconductor Industry Association to call the new tariff list "counterproductive."

 

While many business groups and lawmakers urged the two governments to negotiate instead, there was little sign talks would resume soon.

 

Trump's tariffs did gain some support from an unlikely source, U.S. Senate Democratic leader Charles Schumer, who called them "right on target."

 

"China is our real trade enemy, and their theft of intellectual property and their refusal to let our companies compete fairly threatens millions of future American jobs," Schumer said in a statement.

 

The USTR official said the tariffs were aimed at changing China's behavior on its technology transfer policies and massive subsidies to develop high-tech industries. The United States now dominates those industries, but Chinese government support could make it difficult for U.S. companies to compete.

 

Washington has completed a second list of possible tariffs on another $100 billion in Chinese goods, in the expectation that China will respond to the initial U.S. tariff list in kind, sources told Reuters.

 

U.S. soybean futures plunged 1.5 percent to a one-year low on concerns that an escalating trade fight with China will threaten shipments to the biggest buyer of the oilseed, traders said.

 

Beijing and Washington had held three rounds of high-level talks since early May but failed to reach a compromise. Trump was unmoved by a Chinese offer to buy an additional $70 billion worth of U.S. farm and energy products and other goods, according to people familiar with the matter.

 

Analysts at Capital Economics said the impact of the tariffs on China's economy would be small. Even if the U.S. duties reach the full $150 billion, they estimated it would shave well under a half-percentage point off China's annual growth rate, which could be offset by fiscal and monetary policy actions.

 

"Neither side will be brought to its knees – which is one reason to think the trade dispute could drag on," Capital Economics said. "For China’s part, its leaders will be determined not to be seen to back down to foreign pressure."

 

Although shares of some tariff-sensitive companies fell on Wall Street, the stock market overall fell only modestly.

 

"With the announcement of the tariffs, there's a real risk that we can see a continued increased escalation," said Robin Anderson, senior economist at Principal Global Investors in Des Moines, Iowa. But he said that underlying strong economic fundamentals in the United States would dampen the market impact.

 

Trump has also triggered a trade fight with Canada, Mexico and the European Union over steel and aluminum and has threatened to impose duties on European cars.

 

While China in recent months made incremental market-opening reforms in industries that critics in the foreign business community say were already planned, it has not been inclined to yield on its core industrial policies.

 

 

-- © Copyright Reuters 2018-06-16

[Samui Bodoh]

I am not an expert in this area, but everything that I read in the papers tells me that China engages in practices that are worthy of a trade fight.

 

However, I have to question the wisdom of the US pursuing this at this particular time and in this particular manner; it seems to me that if you want to have a trade war with China, then you should have agreed to the TPP in order to have strong allies in the region and you should not have pissed off all your closest trading partners with the idiotic steel and aluminum tariffs.

 

If you want a trade war, shouldn't you line up your allies and supporters behind you rather than piss them off just before you launch it? In my eyes, the US has drastically lessened the odds of being successful by not coming at China with the backing of many other nations, and further made it more likely that this will end in a stalemate that hurts everybody.

 

Slapping China on the trade front is a good policy.

 

Slapping China on the trade front without the firm backing of numerous other trading nations is the height of stupidity.

 

Well done, Trump!

 

[leeneeds]

Way too late,on imbalance of trade, now only minimal damage will be done to China, 

insatiable thirst that can not be filled, China has for years copied and unilaterally  gained where possible technology they did not produce at home,

US debt is running at 21 trillion, China has 1.18 trillion of that debt and that is trouble for China how to extricate ones holding of so much dollar. If they float the RMB it will become the main player on money markets, the USA will have to take a back seat, 

 Numero uno no more.

 

[Get Real]

With China leading in trade value with a difference in 348 billion US, then I would suggest that Mr Trump realize his position. 

Edited June 16, 2018 by Get Real

[bristolboy]

1 hour ago, Samui Bodoh said:

I am not an expert in this area, but everything that I read in the papers tells me that China engages in practices that are worthy of a trade fight.

 

However, I have to question the wisdom of the US pursuing this at this particular time and in this particular manner; it seems to me that if you want to have a trade war with China, then you should have agreed to the TPP in order to have strong allies in the region and you should not have pissed off all your closest trading partners with the idiotic steel and aluminum tariffs.

 

If you want a trade war, shouldn't you line up your allies and supporters behind you rather than piss them off just before you launch it? In my eyes, the US has drastically lessened the odds of being successful by not coming at China with the backing of many other nations, and further made it more likely that this will end in a stalemate that hurts everybody.

 

Slapping China on the trade front is a good policy.

 

Slapping China on the trade front without the firm backing of numerous other trading nations is the height of stupidity.

 

Well done, Trump!

 

The big problem with China is not the trade deficit.  It's the blackmail they use on corporations to get technology. A really effective way to punish China would be to cut off Chinese firms from American technology. Like the ZTE case. Trump backed down on that one.

[sammieuk1]

As no bombs look likely to dropped on Kim this week its a good time to start a trade war .

[mtls2005]

tRump says "trades wars are good" and "trade wars are easy to win" so I'm looking forward to the "Mission Accomplished" banner/celebration soon.

[candide]

For once, I think that Trump has a real point. However, as mentioned by other posters, there is a lack of coherence with other initiatives which lowers the odds of success.

[Trouble]

Even Schumer is in agreement on this.  Got to be a first.

[Anak Nakal]

Make friend angry.

Start war.

Stupid stupid man!

[wombat]

push you shove me, handbags at dawn please gentleman.

[thaichiro]

Trump, once again, advertising his ignorance and incompetence. As Nietzsche said, ignorance is bad enough, but ignorance in action is dangerous.

[geriatrickid]

Trump has started a trade war with the EU, Canada and now China.

US taxpayers and consumers are going to pay the price of his bad strategy.

Here's the problem;

-The issue with Canada  was BS, because the USA has an overall trade surplus and US corporations own a large chunk of Canada's manufacturing and service sector. 

-The  fight with the EU has some valid aspects, because there is a physical trade deficit. However, it overlooked the fact that the USA  takes money out of the EU because of the transfer of profits back to US investors. The most obvious examples are the pharma companies who moved to Ireland for corporate tax reasons. Theirmassive profits are returned to the US shareholders.

- China is walking all over Canada, the EU and the USA. However, the USA cannot take on China alone and win. It can't. It needs a common front with the EU and Canada to address the unfair trade practices.  Unfortunately, because Trump is trying to bully and blackmail Canada and is now trying to fight with the EU, he has no friends in his fight with China. Bad move.

He could have negotiated his concerns with the EU and was close to a deal with Canada, but he blew it. It's sort of telling when the conservative NY Post  runs a story like this. https://nypost.com/2018/06/14/canadians-boycott-us-products-cancel-vacations-to-america/

 

 

[mtls2005]

58 minutes ago, wombat said:

handbags at dawn please gentleman.

 

An Ivanka Trump, Chinese-made, Chinese-trademarked bag, sans tariff, if you please.

 

Preferably manufactured by children because, well, we're all about family values.

 

 

[bristolboy]

5 minutes ago, geriatrickid said:

Trump has started a trade war with the EU, Canada and now China.

US taxpayers and consumers are going to pay the price of his bad strategy.

Here's the problem;

-The issue with Canada  was BS, because the USA has an overall trade surplus and US corporations own a large chunk of Canada's manufacturing and service sector. 

-The  fight with the EU has some valid aspects, because there is a physical trade deficit. However, it overlooked the fact that the USA  takes money out of the EU because of the transfer of profits back to US investors. The most obvious examples are the pharma companies who moved to Ireland for corporate tax reasons. Theirmassive profits are returned to the US shareholders.

- China is walking all over Canada, the EU and the USA. However, the USA cannot take on China alone and win. It can't. It needs a common front with the EU and Canada to address the unfair trade practices.  Unfortunately, because Trump is trying to bully and blackmail Canada and is now trying to fight with the EU, he has no friends in his fight with China. Bad move.

He could have negotiated his concerns with the EU and was close to a deal with Canada, but he blew it. It's sort of telling when the conservative NY Post  runs a story like this. https://nypost.com/2018/06/14/canadians-boycott-us-products-cancel-vacations-to-america/

 

 

Actually, it's not true that all their massive profits are returned to American shareholders. The best estimates of who  owns shares in US corporations assigns about 35 percent to foreign shareholders.

[geriatrickid]

17 minutes ago, bristolboy said:

Actually, it's not true that all their massive profits are returned to American shareholders. The best estimates of who  owns shares in US corporations assigns about 35 percent to foreign shareholders.

Why not start with the fact that Trump is using numbers which are incorrect and over inflated with the goal of supporting his claims?

 

Will you accept actual data from the US Government Bureau of Economic Statistics and the non partisan Brookings  Institute?

https://www.brookings.edu/blog/up-front/2018/02/06/the-true-trade-deficit/

 

US companies are playing a shell  game of keeping their cash in US banks away from the  US taxman.

https://qz.com/64264/american-tech-companies-keep-cash-profits-overseas/

 

Instead of blaming foreigners for their woes, Americans need to look at their companies and super wealthy and ask them why they won't pay their  fair share of taxes. They also need to ask themselves why they  have to  drive a car a block to the piggly wiggly, or have to buy  low quality merchandise at  Walmart/Target etc.

The trade deficit is in large part the USA's own doing and if they were more self sufficient and less greedy, there wouldn't be  a problem.

 

 

[hansnl]

5 hours ago, Get Real said:

With China leading in trade value with a difference in 348 billion US, then I would suggest that Mr Trump realize his position. 

China is not a nice trading partner.

Price dumping is one of the tools used.

I am afraid China will feel more pain in the long run, hence their speedy response.

China should not forget many countries are having second thoughts about trading with China.

[flyingtlger]

Better to have friends than enemies......

 

[Srikcir]

1 hour ago, hansnl said:

China should not forget many countries are having second thoughts about trading with China.

China should also not forget that Trump is in trade wars with US allies who may be having second thoughts about trade with the US. I could see opportunities for China to approach those allies in hopes of altering global trade alliances that isolates MAGA.

[Get Real]

1 hour ago, hansnl said:

China should not forget many countries are having second thoughts about trading with China.

Eeeeh? Second thoughts about trading with China??? Great! Good luck!

[Andaman Al]

7 hours ago, bristolboy said:

Like the ZTE case. Trump backed down on that one.

Exactly. And why did he do that. All these trade sanctions and why did he do that? Indonesian money (from China)- 500 million, Trump branded resorts in Indonesia. Patents issued immediately for Ivanka.

 

ZTE is worthy just on it's own for a special council investigation. The swamp is deep and murky.

[spidermike007]

As is the case with most policy that Tiny Don implements, this will hurt the US, a whole lot more than it will hurt China. Same with Canada and the EU. This amounts to a TAX HIKE on his base, and all Americans. Another lie. He is so out of his element, and having super incompetents like Mnuchin and Ross surrounding him, does not help. Hopefully, it will be the beginning of his downfall. The world deserves that. 

 

There is no doubt that China trade policy is unfair. And no doubt they cheat. But, there is a correct way to do this, and then there is the infantile twitter way. 

Edited June 17, 2018 by spidermike007

[Andaman Al]

And in another measured move (sarcasm) Trump prepares to say goodbye to 10 years of economic growth in the United States.

 

Quote

Trump threatens extra tariffs on US$200b of Chinese goods

https://www.channelnewsasia.com/news/asia/trump-threatens-extra-tariffs-on-us-200b-of-chinese-goods-10445482

 

What did Trump say? "Trade Wars are easy to win"!  Well China is about to win this one. But don't worry the TV pundit that Trump made his economic adviser, Larry Kudlow should sort it all out no problem at all.

[stevenl]

2 hours ago, Andaman Al said:

And in another measured move (sarcasm) Trump prepares to say goodbye to 10 years of economic growth in the United States.

 

https://www.channelnewsasia.com/news/asia/trump-threatens-extra-tariffs-on-us-200b-of-chinese-goods-10445482

 

What did Trump say? "Trade Wars are easy to win"!  Well China is about to win this one. But don't worry the TV pundit that Trump made his economic adviser, Larry Kudlow should sort it all out no problem at all.

Yes, he has to, because China's countermeasures are threatening USA's farmers, companies and employees. How dare they, they should have folded and apologized.

[Srikcir]

1 hour ago, stevenl said:

Yes, he has to, because China's countermeasures are threatening USA's farmers, companies and employees. How dare they, they should have folded and apologized.

Now Trump has just threatened to impose tariffs on an additional $200bn (£151bn) of Chinese goods. https://www.bbc.com/news/business-44529149

This is now a trade war.

[stevenl]

10 minutes ago, Srikcir said:

Now Trump has just threatened to impose tariffs on an additional $200bn (£151bn) of Chinese goods. https://www.bbc.com/news/business-44529149

This is now a trade war.

Yes, that is what my and Al's post were about.

[DrTuner]

Somebody has to stop China from buying the world with profits from exploiting it's people and low quality goods. It's going to cost some, but a worthy fight. Contain them back in their commie utopia.

[Andaman Al]

2 hours ago, DrTuner said:

Somebody has to stop China from buying the world with profits from exploiting it's people and low quality goods. It's going to cost some, but a worthy fight. Contain them back in their commie utopia.

?

 

Perhaps the rest of the world needs to stop profiting from exploiting China's people and it's low quality goods.

 

I see Trump has not brought back to the US his or his daughters manufacturing businesses in China? Make the punter pay not the business owner? The guy is full of crap. Nothing surprises me these days from the US apart from the army of zombies that still support this moronic excuse of a head of state.

[bristolboy]

3 hours ago, DrTuner said:

Somebody has to stop China from buying the world with profits from exploiting it's people and low quality goods. It's going to cost some, but a worthy fight. Contain them back in their commie utopia.

Which is why Trump is doing his best to save ZTE?

In fact, punishing China for stealing and extorting technology is what Trump should be doing. But he's not. 

[Andaman Al]

Everybody is missing the thing that is occurring that should actually be up in neon lights right now. In all of this rutting being carried out by Trump, Russia are now receiving billions of dollars worth of new orders from China. Mission accomplished. Trump is complying with his bosses requirements. It will turn out that Trump has been the most prolific traitor of modern times and look how many of you still support him.