U.S. says to slap tariffs on extra $200 billion of Chinese imports

By Eric Beech

 

U.S. President Donald Trump arrive aboard Air Force One at Brussels Military Airport in Melsbroek, Belgium July 10, 2018. REUTERS/Francois Lenoir

 

WASHINGTON (Reuters) - The Trump administration raised the stakes in its trade war with China on Tuesday, saying it would slap 10 percent tariffs on an extra $200 (£150.8 billion) billion worth of Chinese imports.

 

U.S. officials released a list of thousands of Chinese imports the administration wants to hit with the tariffs, including hundreds of food products as well as tobacco, chemicals, coal, steel and aluminium.

 

It also includes consumer goods ranging from car tires, , furniture, wood products, handbags and suitcases, to dog and cat food, baseball gloves, carpets, doors, bicycles, skis, golf bags, toilet paper and beauty products.

 

"For over a year, the Trump administration has patiently urged China to stop its unfair practices, open its market, and engage in true market competition," U.S. Trade Representative Robert Lighthizer said in announcing the proposed tariffs.

"Rather than address our legitimate concerns, China has begun to retaliate against U.S. products ... There is no justification for such action," he said in a statement.

 

Last week, Washington imposed 25 percent tariffs on $34 billion of Chinese imports, and Beijing responded immediately with matching tariffs on the same amount of U.S. exports to China.

 

Investors fear an escalating trade war between the world's two biggest economies could hit global growth.

 

President Donald Trump has said he may ultimately impose tariffs on more than $500 billion worth of Chinese goods - roughly the total amount of U.S. imports from China last year.

 

The new list published on Tuesday targets many more consumer goods than those covered under the tariffs imposed last week, raising the direct threat to consumers and retail firms.

 

The tariffs will not be imposed until after a two-month period of public comment on the proposed list, but some U.S. business groups and senior lawmakers were quick to criticize the move.

 

'TARIFFS ARE TAXES'

Senate Finance Committee Chairman Orrin Hatch, a senior member of Trump's Republican Party, said the announcement "appears reckless and is not a targeted approach."

 

The U.S. Chamber of Commerce has supported Trump’s domestic tax cuts and efforts to reduce regulation of businesses, but it has been critical of Trump's aggressive tariff policies.

 

“Tariffs are taxes, plain and simple. Imposing taxes on another $200 billion worth of products will raise the costs of every day goods for American families, farmers, ranchers, workers, and job creators. It will also result in retaliatory tariffs, further hurting American workers," a Chamber spokeswoman said.

 

The Retail Industry Leaders Association, a lobby group representing the largest U.S. retailers, said: "The president has broken his promise to bring ‘maximum pain on China, minimum pain on consumers.’"

 

"American families are the ones being punished. Consumers, businesses and the American jobs dependent on trade, are left in the crosshairs of an escalating global trade war,” said Hun Quach, the head of international trade policy for the group.

 

There was no immediate reaction from the Chinese government.

 

Although it was not a direct reaction to the new move from Trump's administration, the official English-language newspaper China Daily said in an editorial that Beijing had to stand up to Washington.

 

"China has no option but to fight fire with fire. It has to resolutely fight back while taking proper measures to help minimize the cost to domestic enterprises and further open up its economy to global investors," it said.

 

(Reporting by Eric Beech; Additional reporting by Ginger Gibson and David Shepardson; Writing by David Alexander; Editing by Peter Cooney)

 

-- © Copyright Reuters 2018-07-11

China is not a trading partner, it is an enemy. Just like Japan was in the 1930s.  There should be a trade embargo against China. Every house does not need four or five cheap big screen  televisions. 

35 minutes ago, zydeco said:

China is not a trading partner, it is an enemy. Just like Japan was in the 1930s.  There should be a trade embargo against China. Every house does not need four or five cheap big screen  televisions. 

The Chinese people can also stop eating at the 4,400 KFC's or having coffee at the >3,000 Starbucks or shopping at the >400 Walmarts.  American multi-nationals are using China as their largest expansion market. There is more at stake here than trade in goods like the draft dodger likes to bring up. 

1 minute ago, pegman said:

There is more at stake here than trade in goods

What is at stake is which fundamental value system people want to live under, a totalitarian communist dictatorship that gives each citizen a social credit score that determines whether they can even travel or not or one that allows people fed up with their leaders to oust them at the next election or not. This choice is just as basic as the one presented to the world in the 1930s and the one presented by Soviet tyranny from 1945 to 1989. If big business, which knows no allegiance to any country must suffer, so be it. And so be it for consumers who just must buy a new smartphone every year or whatever useless electronic trinket they are addicted to. 

21 minutes ago, zydeco said:

What is at stake is which fundamental value system people want to live under, a totalitarian communist dictatorship that gives each citizen a social credit score that determines whether they can even travel or not or one that allows people fed up with their leaders to oust them at the next election or not. This choice is just as basic as the one presented to the world in the 1930s and the one presented by Soviet tyranny from 1945 to 1989. If big business, which knows no allegiance to any country must suffer, so be it. And so be it for consumers who just must buy a new smartphone every year or whatever useless electronic trinket they are addicted to. 

Trade is a matter of realpolitik.

 

How many US jobs are reliant on trade with China, how many US companies / farmers would enter into bankruptcy etc etc. Without access to the global supply chain / outsourcing how many US companies would have ceased trading years ago?

 

Trump is making a fundamental mistake with imposing tariffs, in parallel with his underhand methods to try and destroy WTO and many other institutions. US business leaders say tariffs are detrimental to the US economy, US business leaders have walked away from Trump. Trump is unfit to hold the Office of the President of the USA

Trump doing everything he can to tank Obama's boom economy.

2 hours ago, zydeco said:

China is not a trading partner, it is an enemy. Just like Japan was in the 1930s.  There should be a trade embargo against China. Every house does not need four or five cheap big screen  televisions. 

Don't you think that the USA under Trump is going to be the "new" enemy? Like a  ? ?

 

They are getting used to wars. Some years after WW II they fabricated wars; i.e. Vietnam, Iraq.

Now they manipulate a new style of war: trade war under a highly aggressive, incompetent, uncontrolled  buffalo.

I can remember a time when there was no trade with Red China. All that trade went to friendly nations. China should take on a trade war vigorously and show the world

No one wins in a trade war.

4 hours ago, pegman said:

The Chinese people can also stop eating at the 4,400 KFC's or having coffee at the >3,000 Starbucks or shopping at the >400 Walmarts.  American multi-nationals are using China as their largest expansion market. There is more at stake here than trade in goods like the draft dodger likes to bring up. 

I'm not a fan at all of Trump's trade plan with China however, America does have more leverage as it is a much larger market for Chinese goods than is China currently of American goods by hundreds of billions of dollars a year. Walmart alone buys more Chinese goods than do many  countries. That being said, Americans will start seeing prices for imported goods and products made from imported materials going up and seeing their buying power decline as the trade war goes into full effect. Also many multinationals have Chinese partners such as KFC's China operation which is partially owned by the Chinese. Again, not a fan of Trump's plan. Any of his plans for that matter.

2 minutes ago, kamahele said:

I'm not a fan at all of Trump's trade plan with China however, America does have more leverage as it is a much larger market for Chinese goods than is China currently of American goods by hundreds of billions of dollars a year. Walmart alone buys more Chinese goods than do many  countries. That being said, Americans will start seeing prices for imported goods and products made from imported materials going up and seeing their buying power decline as the trade war goes into full effect. Also many multinationals have Chinese partners such as KFC's China operation which is partially owned by the Chinese. Again, not a fan of Trump's plan. Any of his plans for that matter.

Economicaly that's true. But politically, China is in a stronger position. Pretty much absolute control of the press and no worry about elections.

6 hours ago, webfact said:

U.S. officials released a list of thousands of Chinese imports the administration wants to hit with the tariffs, including hundreds of food products as well as tobacco, chemicals, coal, steel and aluminium.

Seriously - the US imports coal from China?

The Chinese must be reselling coal imported from America back to the US.

https://qz.com/1232833/explore-all-506-billion-in-goods-that-the-us-imported-from-china-in-2017/

Note the $1 billion import from China for Rare Earth metals, radioactive elements and isotopes that accounts for 12% by value of Chinese imports.

China produces about 81% of the top eight producers of rare earth metals by metric tons.

https://investingnews.com/daily/resource-investing/critical-metals-investing/rare-earth-investing/rare-earth-producing-countries/

As an adjunct to placing higher tariffs on US imports to China, China could raise the price of its rare earth exports to the US. Let's see Trump add higher import tariffs on those products.

6 hours ago, webfact said:

It also includes consumer goods ranging from car tires, , furniture, wood products, handbags and suitcases, to dog and cat food, baseball gloves, carpets, doors, bicycles, skis, golf bags, toilet paper and beauty products.

100% of Ivanka Trump’s fashion products were were made overseas—at least until early 2017.

And now her goods are avoiding the sweeping tariffs enacted by President Trump in his trade war with China. Clothing and shoes, like those imported by Ivanka Trump’s company, were spared.

http://fortune.com/2018/07/09/donald-trumps-china-tariffs-dont-apply-to-ivanka/

Family first, America second.

Look, if Washington is going to fght a trade war against China, then, Washington has to do the following.

Washington must isolate China, Washington must be friends with Mexico, Canada and Europe. Have free trade with THOSE areas, and then put up barriers against the Chinese goods entering America.


Right now, Washington is trying to fight a trade war against everybody else, all at the same time. This is economic suicide. Washington will lose, and America will suffer.

8 hours ago, pegman said:

The Chinese people can also stop eating at the 4,400 KFC's or having coffee at the >3,000 Starbucks or shopping at the >400 Walmarts.  American multi-nationals are using China as their largest expansion market. There is more at stake here than trade in goods like the draft dodger likes to bring up. 

You just learned something new today:

 

"The China operations of all-American brands ranging from Coca-Cola Co. and McDonald’s Corp. to Walt Disney Co. are co-owned by state-backed Chinese firms."

 

https://www.bloomberg.com/news/articles/2018-07-03/xi-faces-hurdles-bashing-american-brands-in-a-trump-trade-war

 

 

4 hours ago, bristolboy said:

Economicaly that's true. But politically, China is in a stronger position. Pretty much absolute control of the press and no worry about elections.

I don't think China is in a very strong position. They have done some financially very bad investments since 2008. It could all fall apart soon. Just look at Pakistan as an example. they owe Chine $60 billion but have only $9.8 billion in foreign reserves.

Venezuela owe China $63 billion. Will they ever pay that back, don't think so.

Ghost cities and zombie projects everywhere.

 

https://www.bloomberg.com/news/articles/2018-07-10/pakistan-s-indebted-economy-careens-toward-another-imf-bailout

Does trump have rabies?lol hey baby man clown don’t ya want China’s help with n Korea?mr master negotiator?

9 minutes ago, ExpatOilWorker said:

I don't think China is in a very strong position. They have done some financially very bad investments since 2008. It could all fall apart soon. Just look at Pakistan as an example. they owe Chine $60 billion but have only $9.8 billion in foreign reserves.

Venezuela owe China $63 billion. Will they ever pay that back, don't think so.

Ghost cities and zombie projects everywhere.

 

https://www.bloomberg.com/news/articles/2018-07-10/pakistan-s-indebted-economy-careens-toward-another-imf-bailout

On the other hand, it does have over 3 trillion dollars in foreign exchange reserves

https://tradingeconomics.com/china/foreign-exchange-reserves

13 minutes ago, ExpatOilWorker said:

I don't think China is in a very strong position. They have done some financially very bad investments since 2008. It could all fall apart soon. Just look at Pakistan as an example. they owe Chine $60 billion but have only $9.8 billion in foreign reserves.

Venezuela owe China $63 billion. Will they ever pay that back, don't think so.

Ghost cities and zombie projects everywhere.

 

https://www.bloomberg.com/news/articles/2018-07-10/pakistan-s-indebted-economy-careens-toward-another-imf-bailout

Peanuts!

https://www.thebalance.com/u-s-debt-to-china-how-much-does-it-own-3306355

14 hours ago, bristolboy said:

On the other hand, it does have over 3 trillion dollars in foreign exchange reserves

https://tradingeconomics.com/china/foreign-exchange-reserves

People seem to awe at the $3 trillion, but fact is that it can evaporate fast and China desperately need it to stay in the IMF basket of currencies.

China had $4 trillion in 2015, but about $1 trillion ran for the exit. It could happen again.

 

China's banking sector is about $36 trillion, nearly twice the size of all US banks. This monster could be very hard to tame if (or when) a real-estate/banking crisis start in China.

14 hours ago, whatsupdoc said:

Peanuts!

https://www.thebalance.com/u-s-debt-to-china-how-much-does-it-own-3306355

Correct. The American public debt is peanuts compared to China's 300% of GDP debt.

 

Greece also had 300% of GDP debt, the result was a drop of 20% in GDP when they tried to slim down.

The dear General just threw Thailand under the debt bus of China:

 

https://www.bloomberg.com/news/articles/2018-07-11/thai-junta-eyes-chinese-investment-for-51-billion-spending-plan

23 hours ago, pegman said:

The Chinese people can also stop eating at the 4,400 KFC's or having coffee at the >3,000 Starbucks or shopping at the >400 Walmarts.  American multi-nationals are using China as their largest expansion market. There is more at stake here than trade in goods like the draft dodger likes to bring up. 

 

While they may be going to China for expansion, good luck doing anything with their Chinese profits besides expanding in China.  That's part of what the dispute is about.  A Chinese company operating in the USA can do whatever they want with their profits.  A foreign company operating in China has very limited options.  And that's just one of many unfair practices that need to be corrected in order to look at them as a legitimate trading partner.

 

18 hours ago, kamahele said:

I'm not a fan at all of Trump's trade plan with China however, America does have more leverage as it is a much larger market for Chinese goods than is China currently of American goods by hundreds of billions of dollars a year. Walmart alone buys more Chinese goods than do many  countries. That being said, Americans will start seeing prices for imported goods and products made from imported materials going up and seeing their buying power decline as the trade war goes into full effect. Also many multinationals have Chinese partners such as KFC's China operation which is partially owned by the Chinese. Again, not a fan of Trump's plan. Any of his plans for that matter.

Trump has put tariffs on inputs of American manufactured goods such as aluminum and steel. Cars and trucks made in the USA are going up in price because of that. Consumers will just put off those type of major purchases causing companies like GM to reduce their workforce. This will come before American Nov elections. It will not be the American nor Chinese people who stop this brinkmanship. It will be one of Trump, who risks his House majority or Xie who is pretty much bulletproof? I'm keeping with my prediction Trump starts caving in Sept 2018.

14 hours ago, bristolboy said:

On the other hand, it does have over 3 trillion dollars in foreign exchange reserves

https://tradingeconomics.com/china/foreign-exchange-reserves

 

They get foreign exchange reserves because when something is exported from China, there has to be an offsetting transfer of hard currency to pay for it.  The government owned banks get that hard currency (not the exporter) and prints up some RMB to pay the exporter.  There is no bank in the world that can offer a return on trillions of dollars (without the risk of collapsing), so the PRC invests it into government backed debt.  They're the only entities that can absorb $$ trillions.   It's not as if they're being benevolent.  And they, in turn, use that hard currency to advance their agenda around the world.  And those policies are more sources of trade friction.  Very lopsided.

 

Besides, $3 trillion is only $2,000 USD per citizen.  Even if that's an astounding number, it isn't much of a safety net.

 

To be fair, I've dealt in China since 2000 and I stand in awe at what they've been able to accomplish.  But there needs to be some corrections in some of the lopsided trade policies now that they are no longer destitute.

 

1 hour ago, ExpatOilWorker said:

The dear General just threw Thailand under the debt bus of China:

 

https://www.bloomberg.com/news/articles/2018-07-11/thai-junta-eyes-chinese-investment-for-51-billion-spending-plan

And this means the direct importation of tens if not hundreds of thousands of Chinese to work on those projects, as the Chinese don't hire the locals for anything but serving them up noodles.

2 hours ago, impulse said:

While they may be going to China for expansion, good luck doing anything with their Chinese profits besides expanding in China. 

Aren't two of those Chinese-owned businesses that pay franchise fees to the American Starbucks and KFC? The more outlets the more franchise fees. Those fees are paid before profits, the net of which remain with the Chinese owners.

Walmart is more complicated. US Walmart brings to China expert vertical supply, marketing and management systems, and little else. Over 95% of the merchandise in Walmart stores in China is sourced locally; 99.9% of Walmart China associates are Chinese nationals. All the stores in China are managed by local Chinese. http://www.wal-martchina.com/english/walmart/index.htm

3 hours ago, ExpatOilWorker said:

People seem to awe at the $3 trillion, but fact is that it can evaporate fast and China desperately need it to stay in the IMF basket of currencies.

China had $4 trillion in 2015, but about $1 trillion ran for the exit. It could happen again.

 

China's banking sector is about $36 trillion, nearly twice the size of all US banks. This monster could be very hard to tame if (or when) a real-estate/banking crisis start in China.

"China’s foreign currency reserves stand at US$3 trillion and China’s annual current account surplus is US$200 billion. And as most of China’s debt is domestic, the People’s Bank of China is still ultimately in control of sovereign monetary policy and can manipulate the exchange rate to favour its trade policy. This means China’s circumstances are worlds away from both Greece who had no monetary policy control, and the United States who had no exchange rate control."

http://nationalinterest.org/blog/the-buzz/scary-statistic-chinas-debt-gdp-ratio-reached-257-percent-22824

2 hours ago, ExpatOilWorker said:

Correct. The American public debt is peanuts compared to China's 300% of GDP debt.

 

Greece also had 300% of GDP debt, the result was a drop of 20% in GDP when they tried to slim down.

Greece has no control over its currency. That makes a huge difference.

And tariffs aren't the only way China can retaliate against the US:

How Rare Earths (What?) Could Be Crucial in a U.S.-China Trade War

And in one of its more strategic weapons, Beijing could use its dominance to cut off key parts of the global supply chain. China is the major supplier of a number of mundane but crucial materials and components needed to keep the world’s factories humming. 

https://www.nytimes.com/2018/07/11/business/china-trade-war-rare-earths-lynas.html

 

 

Quote

 

Stock analysts who once downplayed the risks of the conflict are now starting to get seriously worried. 

Wall Street sees no easy off-ramps to U.S. trade war with China

• Global investors have mostly looked past the intensifying trade fight between the U.S. and China, even as the countries move to deploy tariffs on hundreds of billions of dollars in goods. But the mood on Wall Street is darkening, with analysts increasingly warning of the potential impact on financial markets as the world's two largest economies square off.

 

•  

Anyone with indexed mutual funds? It's been good hasn't it, and now, likely not going to be good. I have a couple K in USD floating around for trips outside. Tomorrow taking half of it down, chunking into baht in the Thai Bank Account.

gurgle .... arf.  The acid re-flux problems  of dealing with a semi senile, mentally unstable, ADD afflicted spud, who can't read three paragraphs in a row.

f