China trade war enters new phase

Andrew Cummings
September 18, 2018

Last week, Beijing said it welcomed overtures from USA officials offering to re-start trade talks, but press reports indicate China would call off any meetings if the new punitive duties take effect.

The tariffs will be 10 percent until the end of the year then go to 25 percent to allow businesses to adjust.

Then last month, the escalating trade war moved up a gear when the United States brought in a 25 percent tax on a second wave of goods worth $16b.

However, Trump has threatened recently to potentially target all items exported from China if the Chinese government retaliates.

"Tariffs on another $200 billion will mean about 12 percent of United States imports have seen a tariff hike".

"If China counters this tariff increase - which I expect they will - and then the U.S. does some more, then before you know it we could be captured in something that would be extremely harmful to our exporters and by then it would be too late for us to have any say".

China has vowed to retaliate for the latest U.S. tariffs with new import taxes on $60b in American products. And in a victory for Apple Inc. and its American customers, the administration removed smart watches and some other consumer electronics products from the list of goods imported from China.

In a filing with the government, for instance, Giant Bicycles Inc. of Newbury Park, California, noting that 94 percent of imported bicycles came from China a year ago, complained that "there is no way our business can shift its supply chain to a new market" to avoid the tariffs and warned "a tariff increase of this magnitude will inevitably be paid for by the American consumer".

A gauge of global equity markets eased and the dollar slipped on Monday as an expected new round of tariffs from Washington on Chinese goods made investors skittish about an escalation of a U.S. -Sino dispute over trade.

The U.S. had already imposed tariffs on $50 billion in Chinese imports.

U.S. industries have generally opposed tariffs, arguing they increase prices for consumers and could hurt economic growth. He didn't answer directly when asked whether Beijing would back out if U.S. President Donald Trump goes ahead with a proposed tariff hike on $200 billion of Chinese goods.

Parker said New Zealand was dependent on "rules-based trade agreements" and rising protectionism around the world was not in the country's interests.

The US Treasury had invited Chinese officials for more talks to try to resolve trade differences last week but the prospect of negotiation seems bleak now.

According to Reuters, smart watches from Apple and Fitbit, as well as some consumer safety products, such as bicycle helmets and baby auto seats, are exempt from the new tariffs.

Earlier on Monday, White House economic adviser Larry Kudlow said the United States was ready to negotiate a trade deal with China if Beijing was ready for serious discussions.

"For months, we have urged China to change these unfair practices and give fair and reciprocal treatment to American companies", Trump said in a statement.

"China has had many opportunities to fully address our concerns", Trump said. Some of them have criticized Mr. Trump's tactics but many echo US complaints about Chinese market barriers and industrial strategy.

Since Trump announced his steel and aluminum tariffs, employment in primary metals manufacturing - which includes those industries - has increased by less than 1,000 jobs, according to the Labor Department.

But Trump and European Commission President Jean-Claude Juncker announced a plan on July 25 to defuse the row, with Washington backing off the auto tariffs against Europe, at least for now. "If countries will not make fair deals with us, they will be 'Tariffed!'". Envoys from the two countries last met August 22 in Washington but reported no progress.

FILE PHOTO - Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., September 12, 2018.

Other reports by iNewsToday