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China threatens new tariffs on 60 billion dollar worth of USA goods

06 August 2018

China on Friday threatened additional measures against the United States after Trump, earlier in the week, ordered his administration to consider more than doubling proposed tariffs on $200 billion worth of Chinese goods to 25 percent from 10 percent. Tariffs of 2,3 percent hardly represent a tariff war, let alone a trade war.

Ford and General Motors lowered profit forecasts for 2018, citing higher steel and aluminium prices caused by new United States tariffs.

A dip in auto exports and rising oil prices in June drove the biggest increase in the United States trade deficit in 19 months, reversing much of May's export bonanza, the government reported Friday.

He predicted that the U.S. market will "go up dramatically" after the "horrible Trade Deals" are successfully renegotiated. Much of the trade war with allies is really about US domestic politics and the upcoming US November midterm elections. A final decision on the tariffs isn't expected until September.

Trump portrays the tariffs as a tax on foreigners, but the reality is that tariffs are taxes on US companies and consumers.

The essential objective foundations of the trade war are now emerging more clearly into the open. While they have targeted each other's products, the interconnected nature of the global economy has meant that other regions, like Europe, have also been caught up in the back-and-forth.

Trump and his team have repeatedly argued that a little short-term pain from the tariffs will be worth it in the end when the president negotiates new trade deals and terms with other nations that lower trade barriers.

The US, the world's largest economy, has a trade deficit of nearly Dollars 500 billion with China, the world's second largest economy.

In a series of tweets on Saturday, Trump disagreed.

We had gone far toward creating a Trans-Pacific Partnership before Trump pulled out of it, and the other countries in those talks are moving forward without us.

Finally, when it comes to what China does, look no further than the Yuan, whose sharp devaluation started in mid-June, when Trump formally launched the trade war, announcing that new tariffs on $50BN in Chinese products will come into effect, followed just days later with the launch of the next, $200BN round of tariffs.

Pompeo added that he had discussed trade issues with China's State Councillor Wang Yi on Friday. "Trump looks likely to follow up his victory in the first round with more attacks".

Amid the more heated rhetoric, United States stocks ended the week up about 0.8 per cent, the fifth straight week of advances. It did not specify what they might be, but could include increased checks on U.S. products, delays in approvals for USA firms seeking licenses and other business requirements.

The auto industry seems to have been the most affected so far, with three major automakers recently warning that changes to trade policies are hurting performance.

The US and China: poles apart?

The question is what other tools the two countries may use, once they have no more goods upon which to impose tariffs.

Kudlow added: "We will not let China steal our technology". Yet while the Chinese public and private sectors invest in one another based on the principles of the cyclically prosperous market socialist model, the USA is now being forced to subsidise (aka pay) its own farmers whose industry has been partly stagnated during the early stages of the trade war on China.

China threatens new tariffs on 60 billion dollar worth of USA goods