Revived China trade war poised to weigh on USA economic growth

Ann Santiago
Мая 12, 2019

China strongly opposes the latest U.S. tariff hike, and as a nation, has to respond to that, Liu told a small group of Chinese reporters in the video clip.

President Donald Trump boosted tariffs Friday on $200 billion in goods from China and threatened to impose more in his most dramatic steps yet to extract trade concessions, saying there's "no need to rush" a deal even though the uncertainty is roiling markets and clouding the global economy.

Deputy Chief Cabinet Secretary Kotaro Nogami told reporters that Japan hoped the USA and China would resolve their trade disputes through dialogue.

Thursday, President Trump blamed China for escalating tariffs, he said, "They renegotiated the deal".

China can not make concessions on those principle issues, he said, but did not provide details. China is the fourth largest export market for USA agriculture.

White House officials have stressed that both sides are eager to wrap up talks; last week, Treasury Secretary Steven Mnuchin told FOX Business that although they still had "more work to do", enforcement mechanisms were "close to done". Trump appears to be suggesting that a tariff increase would generate revenues that could then be spent on farm products and infrastructure, something that might in theory require support from Congress.

French Finance Minister Bruno le Maire told the CNews television network on Friday: "There is no greater threat to world growth... to the standard of living of everyone listening to us, than a trade war between China and the United States".

"Tariffs will bring in FAR MORE wealth to our country than even a phenomenal deal of the traditional kind", Trump wrote. This is meant to punish China for refusing the accept the terms of a trade deal Trump's team proposed.

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The latest USA increase might hit American consumers harder, said Jake Parker, vice president of the U.S.

Some economists, however, predict such tariffs would cut in half the USA economic growth seen in the first quarter of this year. "Nothing planned as of now", he told USA business news network CNBC.

Speaking about the impact of disagreements with the United States on the Chinese economy and about the possibility of its downturn due to heightening tensions, Liu said "China is not afraid". But that spectacularly fell through after meetings in Beijing two weeks ago, after which Trump accused China of reneging on its agreements and threatened to increase the tariffs he had imposed previous year in an effort to show Beijing he was serious. It may take three or four months for American shoppers to feel the pinch, economists and industry consultants say.

"Earlier today, at the direction of the President, the United States increased the level of tariffs from 10 per cent to 25 per cent on approximately Dollars 200 billion worth of Chinese imports", Lighthizer said.

Trump also noted that the massive tariffs he levied on China "may or may not be removed depending on what happens with respect to future negotiations!"

China wants tariffs lifted as soon as an agreement is reached, while USA officials want to keep them as leverage to ensure compliance.

The trade war has weighed on the Chinese economy.

"A real enforcement mechanism is critical", the American Chamber of Commerce in Shanghai said in a statement.

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