Big losses on Wall Street as US-China trade war escalates

Ann Santiago
Мая 15, 2019

Earlier, Trump urged China not to wait for the 2020 United States presidential elections and quickly strike a trade deal, stressing that a new post-election deal could be "far worse" if it has to be negotiated in a second Trump term. Also, the Tariffs can be completely avoided if you by from a non-Tariffed Country, or you buy the product inside the U.S. (the best idea).

'Many Tariffed companies will be leaving China for Vietnam and other such countries in Asia. And that means imposing tariffs, " said Gary Hufbauer of the Peterson Institute for International Economics.The biggest risk remains that Trump's tariffs will be greeted by yet more retaliation from China and other countries.

WASHINGTON: The US-China trade war escalated Monday as Beijing announced it would raise painful tariffs on $60 billion in US exports by next month, responding in kind to President Donald Trump's decision last week to hike duties on hundreds of billions of dollars in Chinese merchandise.

Trump, who has embraced protectionism, also repeated the rhetoric of his "America First" agenda in an string of early morning tweets on Tuesday.

China announced Monday that it will compile and release a list of imported USA products eligible for exclusion from the additional tariffs after examining the applications of relevant interest parties on a trial basis.

In reaction to the announcement by China, US equity futures tumbled with the S&P 500 down 1.8%, while the US Dollar also dropped. The Trump administration has raised tariffs on $200 billion of Chinese imports after charging that China had backtracked on commitments it made in earlier negotiations. "The U.S. -instigated trade war against China is just a hurdle in China's development process".

Beijing is running out of US imports for penalties due to the lopsided trade balance between the world's two largest economies. Rand and other legislators have warned that a damaging trade war is in prospect.

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White House economic adviser Larry Kudlow contradicted Trump's claim, when he said American consumers "will suffer" along with their Chinese counterparts as a result of increased tariffs.

Even as his administration was busy slapping a hefty 25 per cent tax on $250 billion of Chinese imports last week, President Trump was tweeting about the strength of his relationship with China's President Xi and promising that "conversations into the future will continue". The two countries recently concluded the latest round of trade talks - all of which have failed to resolve several high-profile issues.

Chinese foreign ministry spokesman Geng Shuang told a news briefing in Beijing that China would "never surrender to external pressure".

The consensus among the punditry is that team Trump is correct to go after China's trade practices, but they're doing it the wrong way.

Trump has said he is in no rush to finalise a deal with China. "We've helped them before, and we'll do it again if we have to and if the numbers show that out".

When a tariff is imposed, the importer pays the tariff and generally passes it along.

But actually it's American businesses that will pay the tariffs, and in many cases, pass the expense on to their American customers. The U.S. increases apply to Chinese goods shipped starting Friday, which will take about three weeks to cross the Pacific and arrive at U.S. ports. The yield on the 10-year Treasury fell to 2.40 per cent from 2.45per cent late Friday.

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