ibusinesslines.com September 20, 2018

Wall St takes some knocks but still standing as trade war escalates

07 July 2018, 02:53 | Kelvin Horton

China won't give in to"blackmail on trade vows the commerce ministry More

China won't give in to

Despite three rounds of negotiations between the two sides, including a Chinese pledge to significantly increase purchases of American products, Trump chose to go ahead with the tariffs.

The direct impact of the imposed tariffs on the two countries' economic growth will be modest because the value of goods involved accounts for only a sliver of bilateral trade, but the impact on targeted industries will be significant, some analysts said.

Soybean farmers, along with most of the US agriculture community, have been appealing to Trump to defuse the trade conflict with China, which imported 31 percent of USA soybeans a year ago, making it the world's top purchaser. It will make - it is making already - American consumers pay more for the goods they buy.

China has promised to immediately hit back with tariffs of "equal scale, equal intensity" on American soybeans, corn, wheat, rice, beef, and poultry.

The state-run China Daily fumed: "In effect, the Trump administration is behaving like a gang of hoodlums with its shakedown of other countries, particularly China".

The Trump administration's 25% tariffs affect more than 800 Chinese products worth $34 billion such as industrial machinery, medical devices and auto parts.

"Generally speaking we're not going to get caught up in the tariffs the USA is applying to China because we have a different export profile", said Jacobi, who is executive director of the NZ International Business Forum.

After China announced its willingness to retaliate with a similar amount, Trump threatened tariffs of 10 percent on $400 billion more of Chinese products.

"There's areas where China has very competitive technologies that maybe we're collaborating on and the Chinese may say we'll do it with the Europe or Japanese or go it alone".

The impact is already being felt in the markets.

It is now the "largest trade war in economic history".

He said the better approach would be for the U.S.to work "with our allies to form a common front to push China into a direction of reform that will open up its markets and allow more progress to open trade with China". "The marked increase in new trade restrictive measures among G20 economies should be of real concern to the worldwide community", Mr. Azevedo said, adding that more restrictions had been put in place in the weeks after the period under review ended.

The North American Food Equipment Manufacturers: The tariffs could even trickle down to the cost of fast food, Charlie Souhrada, a vice president of the North American Food Equipment Manufacturers, told The Associated Press.

The dollar and us treasuries have also been sensitive.

Foreign companies accounted for $20 billion, or 59 percent, of the $34 billion of exports from China that would be subject to new USA tariffs, with US firms accounting for a significant part of that 59 percent, Gao said. On Thursday aboard Air Force One, the president vowed to implement tariffs on an additional $16 billion worth of imported Chinese goods within the month.

That would bring the total of targeted Chinese goods to potentially $550 billion - more than the $506 billion in goods that China shipped to the United States previous year.

Throughout the escalating conflict, China has sought to take the high road, positioning itself as a champion of free trade, but state media ramped-up criticism of Trump on Friday. It said US companies want fairer treatment but will be hurt by US-Chinese tensions.

Beijing has also offered the EU an alliance in a trade war with the United States, claiming that "China and European countries are natural partners".

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