Trade tariffs will harm the world

Friday, 13 Jul, 2018

The Trump administration said the proposed list, which would put 10 percent tariffs on thousands of different categories of Chinese imports, is needed to increase the pressure on Beijing to change what the us calls unfair trade practices.

A U.S. Dollar note is seen in this June 22, 2017 illustration photo.

USA financial analysts said Trump appeared to believe there was a political benefit to waging a trade war, although that could change quickly amid economic fallout. "The President made everyone well aware of them".

He said the plastics industry needs a "reliable, rational approach to trade". "So they can absorb the cost" of a trade war, she says.

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".

Oliver Jones from Capital Economics has warned that China's response to Trump's latest tariff threat could hit the USA stock market hard.

"China has not changed its behavior - behavior that puts the future of the USA economy at risk". "As an industry that touches 96 percent of all manufactured goods and which has much to gain from a productive, respectful trading relationship with China, ACC and our members remain hopeful that the USA and China can resolve their differences and prevent further harm to US manufacturers, farmers, and consumers".

But the string of announcements come at a time when there has been slowing foreign investment into China and more vociferous complaints about Beijing's market barriers and the difficulty of doing business in the world's second-largest economy.

The International Monetary Fund has warned that a full-blown trade war could undermine the broadest global upswing in years. In this round, China accounted for more than half of the imports.

This creates what at first seems to be a problem for China: Beijing may soon run out of American goods to tax. While China has fewer goods to tax, they could certainly just jack up tariff rates beyond the 10 percent or 25 percent that Trump is imposing.

In Beijing, Li Chenggang, assistant minister at China's Commerce Ministry, said that the latest USA proposals would hurt both countries and pointed to declines in Chinese export growth and overseas investment to the United States in the first half of this year.

Trump has been following through on pledges he made during his 2016 presidential campaign to get tough on China, which he accuses of unfair trade practices including theft of intellectual property and forced technology transfer that have led to a $375 billion USA trade deficit with China.

"Tariffs on $US200 billion in Chinese products amounts to another multibillion-dollar tax on American businesses and families", said Scott Lincicome, a trade lawyer and senior policy analyst for the group Republicans Fighting Tariffs.

Trump has been considering tariffs against China since his officials concluded in March that Beijing violates USA intellectual-property rights, such as by forcing American firms to hand over technology.

"I don't want to hamstring the president's negotiating tactics, but I have long said I don't think tariffs are the right way to go", Ryan said during a press conference Wednesday morning.

'We can not turn a blind eye to China's mercantilist trade practices, but this action falls short of a strategy that will give the administration negotiating leverage with China while maintaining the long-term health and prosperity of the American economy'.

The Chinese government, however, called it "totally unacceptable" and said it would take unspecified countermeasures.

Flooring products included on list are vinyl; plastic; wood-both engineered and solid; bamboo; cork; carpet-tufted and woven; tile; and ceramic-glazed and unglazed. The two countries signed commercial accords worth €20 billion (US$23.5 billion), including the BASF agreement.