Published: Tue, September 18, 2018
Business | By Tara Barton

Trump promises post-market announcement as China tariff reports swirl

Trump promises post-market announcement as China tariff reports swirl

US President Donald Trump Monday announced imposing new tariffs on an additional Dollars 200 billion worth of imports from China, escalating the trade war with the Asian giant.

Once the new round of tariffs takes effect on Sept 24, punitive duties will be in place on roughly half of the products the U.S. buys from China - its largest source of imported merchandise.

Why has Trump moved now?

China only imports around $130bn from America, meaning it can't simply announce a tit-for-tat retaliation.

Other officials who advise the country's leaders are suggesting China impose limits on the sale of parts and supplies needed by USA businesses, using "export restraints" to threaten their supply chains.

The new list would also spare fitness trackers from Fitbit Inc, which had said in a comment letter to regulators that the tariffs would compromise its own investment in the United States. But, the official said, they will exclude some consumer electronics such as smart watches and Bluetooth devices as well as health and safety products such as high chairs, bicycle helmets, child auto seats and playpens.

"China may potentially pull out of trade talks entirely and escalate on the new front of outright export restrictions", analysts at JPMorgan told clients. "Once again, I urge China's leaders to take swift action to end their country's unfair trade practices", Trump said in a portion of the message more pointedly aimed at China. The US also asserts that Beijing uses state money to buy American technology at prices unaffordable for private companies.

U.S. companies have already said they are anxious about the effect of higher costs on their businesses.

Trump has also complained about America's gaping trade deficit - $336 billion past year - with China, its biggest trading partner. Steve Mnuchin and Chinese Vice Premier Liu He, respectively, are scheduled to meet in Washington, DC, September 27-28. But, in doing so, they can't take actions that deliberately discriminate against other countries; actions that hurt American workers.

The Trump administration is preparing to slap tariffs on an additional $200 billion in Chinese imports, with the final decision expected at the end of August. The administration is targeting a bewildering variety of products - from sockeye salmon to baseball gloves to bamboo mats - forcing USA companies to scramble for suppliers outside China, absorb the import taxes or pass along the cost to their customers.

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Macao International Airport said there would be 160 flights canceled on Sunday, and another 17 on Monday. It was the first time casinos had shut down since concessions were granted in 2002.

The president says he's under no pressure to make a deal with China, but rather China is under pressure to make a deal with the U.S. But he lowered the proposed duty rates back to 10 percent after announcing last month that they should be increased to 25 percent.

Australian Trade Minister Simon Birmingham warned the trade war between the USA and China would hurt consumers and would have "possible negative effects" on other nation's economies. "I think that kind of tactic is not going to work with China", Fang Xinghai, vice chairman of China's securities regulator, said at a conference in the port city of Tianjin.

President Trump warned that if China takes retaliatory action against U.S. farmers or industries "we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports".

China's yuan currency slipped 0.3 per cent against the USA dollar in Asian tratode on Tuesday.

"In the short term, we will have higher prices and fewer jobs than we would have had otherwise", Sohn said.

Trump's latest escalation of tariffs on China comes after several rounds of talks yielded no progress.

Reports say senior government ministers are meeting in Beijing on Tuesday, while China is reviewing plans to send a trade delegation to Washington for talks next week, according to the South China Morning Post.

Such a move, the official said, is not an effort to constrain China. Some will likely move to other low-priced countries that aren't in the line of fire. The Wall Street Journal reports Pyongyang has worked with Russian Federation and China to avoid sanctions, according to a confidential United Nations report, making the latest economic penalties "ineffective". "Can the U.S. really withstand the pain for three or even five years?" "Now the calculus is more complicated".

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