ZCZC
BCN-08
US-CHINA-ECONOMY-TRADE
Trump targets China with tariffs on $300bn in goods
WASHINGTON, Aug 2, 2019 (BSS/AFP) – US President Donald Trump announced
Thursday he will hit China with punitive tariffs on another $300 billion in
goods, prompting Beijing to warn it was the wrong way to resolve the trade
war.
The sudden deterioration meant the world’s two largest economies have now
erected trade barriers covering virtually all of their $660 billion in annual
trade in merchandise — confirming economists’ fears and sending shudders
through Wall Street.
The 10 percent duties will take effect September 1, and come on top of the
25 percent tariffs on $250 billion in imports already in place.
He later raised the possibility he could increase the duties further.
“The 10 percent is… for a short-term period and then I can always do
much more or I can do less, depending on what happens with respect to a
deal,” Trump said at the White House, adding, “it could be lifted up to well
beyond 25 percent.”
After resuming face-to-face talks in Shanghai this week, trade negotiators
were set to reconvene in Washington in early September for another round of
discussions, which means they will take place just after the new tariffs take
effect.
“Slapping on tariffs is definitely not a constructive way to resolve
economic and trade frictions, it’s not the correct way,” Chinese Foreign
Minister Wang Yi said in brief remarks on the sidelines of a regional meeting
of top diplomats in Bangkok on Friday.
China has yet to say whether and how it will retaliate, but it has hinted
in recent months that it could restrict exports of rare earths, which are
vital to the US tech industry, and it is also working on a blacklist of
“unreliable” companies that could target US firms.
When he announced the tariffs on Twitter, Trump said Beijing had agreed
“to buy agricultural product from the US in large quantities but did not do
so.”
“Additionally, my friend President Xi said that he would stop the sale of
fentanyl to the United States — this never happened, and many Americans
continue to die!” Trump said, referring to the highly potent and addictive
opioid.
MORE/HR/0952
ZCZC
BCN-09
US-CHINA-ECONOMY-TRADE 2 LAST WASHINGTON
Trade relations with China have swung between progress and disaster,
appearing to collapse in May only to be revived two months later after a
meeting in Japan between Trump and Xi Jinping, his Chinese counterpart.
The leaders declared a truce at that meeting in late June, but the new
tariffs make good on a threat Trump made in May.
“The core motivation is the talks clearly weren’t going to go anywhere
without more pressure on the Chinese,” said Derek Scissors, an expert on US-
China economic ties at the American Enterprise Institute, a conservative
think tank.
“Of course, they could react badly now and the talks could end entirely.
It’s a measured risk,” he told AFP.
– ‘Not concerned’ –
In prior tariff rounds, US officials had worked prevent the higher costs
from hitting popular consumer items.
But the new duties coming just before the holiday shopping season, will
cover the vast expanse of everyday Chinese-made goods and consumer
electronics — mobile telephones, baby carriages, tampons, watches and toys.
Trump has falsely claimed China pays for his mounting tariffs. But
Democrats in Congress and business groups say the measures are taxing
ordinary consumers and making household goods more expensive.
While other parts of the US economy have begun to slow, the dominant
retail sector has been a bright spot, helping to bolster growth despite the
general slowdown in most other industrialized nations.
Industries as varied as fashion and oilfield services had pleaded with the
Trump administration to hold fire, warning of layoffs, lost markets and
fading industrial dominance.
Wall Street dove into the red following Trump’s announcement, with
retailers hit particularly hard. The Dow Jones Industrial Average was closed
down more than one percent.
Despite the red arrows on Wall Street, Trump remained upbeat.
“I’m not concerned about that at all,” he told reporters. “I expected
that.”
Washington accuses China of using a state-directed economic model,
unfairly subsidizing production and stealing US technology.
But economists say the trade war has increasingly undermined the global
manufacturing sector and sapped business sentiment, threatening the world’s
economy at a time when it is already on the wane.
BSS/AFP/HR/0955