Published: Mon, July 16, 2018
World Media | By Cesar Oliver

US$200 billion tariff announced, what should China Do?

US$200 billion tariff announced, what should China Do?

"Those talks produced progress, so much so that the USA government said they would put the trade war on hold, but all of a sudden an announcement was made to impose tariffs on imports from China".

US President Donald Trump has warned he may ultimately impose tariffs on more than $500 billion worth of Chinese goods - almost the total amount of US imports from China a year ago.

"China has during this period become a major engine for world economic recovery and growth, contributing almost 30 percent on average per annum to global economic growth", Wang said.

"Chinese exports held up well on the eve of USA tariffs", Julian Evans-Pritchard of Capital Economics said in a report.

"The Dow Jones Industrial Average fell 219 points, or 0.88%, to 24,700, the S&P 500 slid 0.71 percent and the Nasdaq was down 0.55 percent", reports, while the Financial Times said (paywall), "U.S. futures slid" and "industrial stocks were back under fire again" after the new tariff announcements: "Boeing is down 1.2 percent, Caterpillar dropped 1.5 percent and Deere shed 2 percent".

Washington last week imposed 25 percent tariffs on $34 billion worth of Chinese products.

China imported American goods worth $13.6 billion. Beijing vowed "firm and forceful measures" in response, but China's lopsided trade balance means it can not match the full scale of American tariff hikes.

While Brady supports the president's efforts to challenge China - the second-largest economy in the world behind the USA - he believes Trump and Chinese President Xi Jinping should meet to work on crafting a new trade policy that would ease the burden on US businesses and the economy.

Huang noted China has made headway in pushing for more balanced trade, citing surplus having shrunk for eight quarters in a row and a much faster growth pace in imports.

The European Union will open an annual meeting with China on Monday, looking to fend off overtures for an anti-US alliance as China seeks a European counterbalance to United States tariffs. That leaves about $80 billion for penalty tariffs after previous increases either imposed or threatened on a total of $50 billion of US goods are counted.

China's global trade surplus in June narrowed by 10.9 percent to $41.6 percent.

Trade with the Central and Eastern European countries was especially robust, up 14.7 percent year on year.

"The measures taken are against the interests of China, they are against the interests of USA businesses, consumers, workers and farmers. Weaker than forecast imports, will on the margin, add to the narrative about slowing Chinese growth".

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