How Trump's China Tariffs May Cost You More Money

Enlarge this image

Enlarge this image

Stocks began to be traded lower today as a trade war between the U.S. and the other major economies became a reality after President Donald Trump unveiled new tariffs on Chinese goods.

John Connelly, president of the National Fisheries Institute, the U.S. seafood industry's most influential trade group, is calling on USA president Donald Trump and China to pick up a children's book and end their trade dispute.

Chris Rogers, research director of a global shipping data platform called Panjiva, notes that shipments of Ivanka's products seem to have halted since the beginning of March, but explains that it's possible that the company's suppliers have changed and that they are now shipping from China under a code name.

In June, Trump instructed Lighthizer to prepare $200 billion worth of Chinese goods for additional tariffs that will be enforced if Beijing imposed retaliatory penalties on us -made products.

Last Friday, the USA imposed 25 per cent tariffs on $US34 billion ($46 billion) of Chinese products, and Beijing responded by hitting the same amount of United States imports.

"China is shocked by the USA move and the Chinese government, as always, will have to react to defend the core interests of our nation and people", the Commerce Ministry says. "In order to safeguard the core interests of the country and the fundamental interests of the people, the Chinese government will, as always, have to make the necessary counter-measures".

The August 30 date ensures the trade fight features prominently in November's United States congressional elections, and the announcement exposed fissures between Trump and his Republican Party about the strategy.

Investors fear an escalating Sino-American trade war could hit global growth and damage sentiment.

China vowed to fight back against the Trump administration's plans to impose tariffs on an additional $200 billion in Chinese goods, reported Xinhua.

There is a two-month period of public comment on the latest proposed list before the tariffs get imposed. "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".

The new list includes vacuum cleaners, furniture, auto and bicycle parts, French doors and plywood.

That "will hit the Chinese export sector hard", said Rajiv Biswas of IHS Markit in a report.

China imports far less from the United States than the U.S. imports from China.

"This is an appropriate response under the authority of Section 301 to obtain the elimination of China's harmful industrial policies", Robert Lighthizer, the US trade representative (USTR), said. The U.S. last month agreed to lift the measures after ZTE pays a record fine and consents to management changes.

The eventual goal is to impose tariffs on 40 percent of Chinese imports, the same proportion of USA goods hit by Beijing's retaliation, an official told reporters.

"China seems to have no interest in bending and they will retaliate".

Instead, Beijing has other ways to disrupt American companies' operations. Regulators can deny or cancel licenses or tie up companies by launching tax, environmental or anti-monopoly investigations. But that trade deficit also means China will run out of imports to tax long before America does.

One senior European official commented that North Atlantic Treaty Organisation members are preparing for a worst-case scenario should Mr Trump repeat his threat to end or curtail defence cooperation, with allies not on track to hit their defence funding target of 2% of GDP by 2024.

The new list published on Tuesday targets many more consumer goods than those covered under the tariffs imposed last week, raising the direct threat to consumers and retail firms.

"Tonight's announcement appears reckless and is not a targeted approach", Senate Finance Chairman Orrin Hatch, a Utah Republican, said in a statement. They have given no indication when they might meet again.

Chinese leaders have tried without success to recruit support from Europe and other governments. They criticize Trump's tactics but share USA complaints about Beijing's industrial policies.

Propaganda authorities have also issued unusually strict rules limiting local media coverage of the trade war because of worries that unrestrained reporting could set off panic and roil its already jittery financial markets, sources within Chinese state media have said.

Stock markets in Asia fell sharply during early trading on Wednesday amid the escalating trade tension between the two economic giants.

However, the worst performing market was the Shanghai composite, which tumbled 1.8 per cent.

Latest News