US Expects China Tariff Retaliation

Andrew Cummings
May 13, 2019

Jon Taylor, a political science professor at the University of St. Thomas in Houston, told Xinhua that ranting about deal-breaking and increasing tariffs "is not a normal negotiation strategy with one of the world's preeminent powers".

Lighthizer said a final decision on that has not yet been made but it would come on top of the Friday tariff rate increase to 25% from 10% on $200 billion worth of Chinese imports.

Kudlow also said Trump's plan to raise tariffs across the board could take "a couple of months".

"US-China relations are continuing their steady deterioration, which I think is an inevitable effect of national interests that are starting to overlap and bump into each other and cause friction", said Jonathan Sullivan, a China specialist at the University of Nottingham. But he added that "both sides will suffer on this".

After trade talks broke up later in the day, USA officials said they were preparing to expand those tariffs to cover another $300 billion of goods, covering most imports from China.

Trump has also threatened to impose import taxes on the remaining $300 billion in Chinese imports, a step that Kudlow estimated would take several months to implement.

"I think that China felt they were being beaten so badly in the recent negotiation that they may as well wait around for the next election, 2020, to see if they could get lucky & have a Democrat win - in which case they would continue to rip-off the United States of America for $500 Billion a year", he tweeted.

China's nationalist Global Times tabloid said in an editorial on Monday that the country had no reasons to fear a trade war. They are paid by importers of Chinese goods, usually American companies or the US -registered units of foreign companies.

Trump ordered the increased duties on Friday after two days of talks to resolve the trade battle ended with no deal, although without a breakdown.

"We not expect China to sell US Treasuries", ING said.

Last week's round of US-China trade negotiations failed to produce any results, with Washington subsequently introducing a new set of tariffs on Chinese goods. Offshore yuan fell as much as 0.9% to 6.91 per dollar, a 2019 low.

'I say openly to President Xi & all of my many friends in China that China will be hurt very badly if you don't make a deal because companies will be forced to leave China for other countries. "Buyers of product can make it themselves in the US (ideal), or buy it from non-Tariffed countries.", he said.

Potomac Wealth Advisors President Mark Avallone on the impact of US trade talks with China on the markets and economy. China has said additional duties imposed should be removed for an agreement, setting the stage for weeks of uncertainty in financial markets after investors had thought a pact was near. "We have had unfair trading practices all these years and so in my judgment, the economic consequences are so small, but the possible improvement in trade and exports and open markets for the United States - this is worthwhile doing".

This latest round of tariffs will add another $500 a year in costs for the average American household, says Katheryn Russ, an economics professor at the University of California at Davis.

Larry Kudlow, the chairman of the president's National Economic Council, conceded Sunday in a TV interview that tariff costs are generally passed through in the form of higher prices for customers.

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