China Trade War Will Hurt Shale Drillers

Ann Santiago
June 20, 2018

The 25 percent USA duties on $50 billion of Chinese goods and 10 percent on a further $200 billion - and counter-measures announced by China - could shave 0.3 percent of Chinese GDP growth and 0.2 percent from that of the United States between 2019-2020, according to Oxford Economics.

The president asserted in a statement Monday night that China is determined "to keep the United States at a permanent and unfair disadvantage".

U.S. President Donald Trump said Monday that he had asked the U.S. trade representative to identify Chinese products that would face a new 10 percent tariff. And Trump promised to levy tariffs on a further $200 billion in Chinese goods if Beijing responds to today's action. Yet it is also true that China is the biggest buyer, and as Russell put it, it would be easier for China to find new suppliers of crude than it would be for US exporters to find new buyers.

The ongoing trade dispute between the United States and China knocked the yuan to 6.4660 per dollar, its weakest in more than five months in the offshore market.

Investors had hoped Mr Trump's loud threats were nothing more than bluster but as a trade war looms between the world's two biggest economies, global stocks markets sank.

The Canadian government believes a deal to update NAFTA is still possible despite a US move to impose tariffs on Canadian and Mexican steel and aluminum, Foreign Minister Chrystia Freeland said in Ottawa on Tuesday.

An article on page two of the Communist Party's flagship newspaper said the fundamentals of the Chinese economy haven't changed despite shifts in the domestic and external environment, and a separate story touted the government's fiscal policies as pro-growth.

Being tough with China plays well with many of President Trump's supporters, actual and potential, at a time when he is looking ahead to the Congressional elections in November. The Dow Jones Industrial Average lost more than 1.1 percent at the close of trading and other major indexes posted losses as well.

The Australian dollar sank to a one-year low of A$ 0.7391 as the U.S.

"The US has initiated a trade war and violated market regulations, and is harming the interests of not just the people of China and the US, but of the world".

FILE - U.S. President Donald Trump signs a memorandum on intellectual property tariffs on high-tech goods from China, at the White House in Washington, DC, U.S., March 22, 2018.

White House trade adviser Peter Navarro, who views China as a rival economic and military power, said Beijing had more to lose from a trade war.

Trump recently ordered tariffs on $50bn in Chinese goods in retaliation for what he claimed is theft of intellectual property.

In turn, China says their new import taxes are in response to an earlier set of tariffs by the United States, also of $34 billion at a 25 percent rate.

USA business groups said members were bracing for a backlash affecting all American firms in China, not just in sectors facing tariffs.

It could also be that he thinks China will run out of USA imports against which to retaliate.

Mr Trump also has slapped tariffs on steel and aluminium imports from Canada, Mexico and European allies.

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