Why China Is Losing the Trade War

Share

"The outburst of large-scale mutual levying of tariffs between China and the United States will inevitably destroy Sino-US trade", assistant minister of commerce Li Chenggang told a forum in Beijing on Wednesday. These groups and their GOP members of Congress - previously broadly supportive of Mr. Trump - have begun agitating for the President to ease up in his trade war.

Senate Finance Committee Chairman Orrin Hatch called it "reckless", adding that the tariffs were "not a targeted approach".

Investors fear an escalating trade war between the world's two biggest economies could hit global growth.

The previous round of tariffs: The Trump administration last week imposed 25 percent tariffs on $34 million in Chinese goods, prompting Beijing to impose retaliatory tariffs of the same amount on United States imports.

"There certainly is going to be pronounced risks mainly because we have now moved on to the tit-for-tat-for-tit phase of it", said Vishnu Varathan, head of economics and strategy at Mizuho Bank in Singapore. These tactics include the outright theft of trade secrets, government subsidies to homegrown tech firms and demands that US and other foreign companies hand over technology if they want access to China's vast market.

He said: "Chinese equities were amongst the worst performers today, with the Shanghai Composite dropping 1.8% after the US Trade Representative set out the $200bn of Chinese imports on which it intends to impose a 10% tariff".

More news: RAF 100 Flypast planes spotted over Surrey

The notice forbid the press from relaying any "U.S. news reports or commentary on the trade conflict without waiting for response from the Ministry of Commerce", and urges calm messaging to prevent further escalation of the economic chess match. The move made good on the president's threat to respond to China's retaliation for the initial USA tariffs on $34 billion in Chinese goods, which went into effect on Friday. "China is shocked by the irrational movement of the US. It will also result in retaliatory tariffs, further hurting American workers", a Chamber spokeswoman said.

China, however, has explicitly excluded LNG from its list of USA energy goods that may be subject to tariffs, as it seeks to fight air pollution by a massive switch from coal-fired to gas-fired residential heating. President Donald Trump has threatened higher tariffs on more than $500 billion of goods, or almost all of China's annual exports to the United States.

U.S. officials issued a list of thousands of Chinese imports the Trump administration wants to hit with the new tariffs, including hundreds of food products as well as tobacco, chemicals, coal, steel and aluminum. "China has not changed its behaviour - behaviour that puts the future of the USA economy at risk". When Trump first threatened last month to target another $200 billion of Chinese products, Beijing said it would be "forced to strike back hard, and launch comprehensive measures that match the U.S. move in quantity and quality". Those nations also have retaliated.

"Tariffs are taxes, plain and simple".

Lighthizer said the initial $50 billion in USA tariffs were aimed at goods that "benefit from China's industrial policy and forced technology transfer practices". China received more US crude oil in 2017 than the third- and fourth-largest importers combined, the United Kingdom and the Netherlands.

Share