Published On: Wed, Jul 11th, 2018

Trump escalates Trade war: will impose tariffs on Chinese products for $200 billion; Markets are falling

The Trump administration published a list of Chinese products on which they would impose a customs duty of another 10 percent starting as soon as September.

The Trump Administration escalates the trade war with China: Tonight, the administration published a list of Chinese products valued at $ 200 billion, to which the United States will impose additional tariffs.

In response, the Asian stock markets are falling – the Shanghai index is down 1.9% Tokyo 1.4; Hong Kong by 1.4%. Crude oil is losing 0.7% and trading at $ 73.56 per barrel.

The move comes just days after the two countries imposed tit-for-tat tariffs of $34 billion on each other’s goods.

China has not yet officially responded by taking its own steps, but a senior Commerce Department official said China would respond aggressively to the tariffs. The US behaves irresponsibly, Chen Cheng, the assistant trade minister, told reporters at a forum in Beijing that hosts China with the city of Chicago.

The 10% caps may take effect after discussions on this issue end on August 30, US Trade Representative’s announcement on Tuesday night.

The products listed include consumer goods such as garments, TV components and refrigerators, and high-tech products. The list lacks cellular phones, as the US apparently wants to protect Apple from harming its business.

Donald Trump, Adam Smith and American Trade Wars

However, the list includes rare minerals that are essential components of many products, from hybrid cars to flat screens and wind turbines.

At the beginning of the decade, the US filed a complaint with the World Trade Organization (WTO) against China on the grounds that it restricted the export of these minerals and demanded that it export more after prices surged due to global shortages.

The organization ruled in favor of the US, and prices eventually dropped after the manufacturers went to use the alternatives.  China exported more than 80 percent of the rare minerals last year, according to the US State Department Geological Survey.

If this step comes into force, covering Chinese goods will apply to almost half the imports from it. The US imports goods valued at 505 billion US dollars a year and has a trade deficit of 375 billion dollars, as of 2017.

The trade war officially opened on Friday morning, when the United States imposed 25 percent on goods imported from China worth $ 34 billion.

China immediately reciprocated, saying that the United States launched the largest trade war in history.

The application of customs duties comes after months of threats, negotiation, retreat and return to militant rhetoric from the United States and China.

China was to begin its first round of littering at night but withdrew and decided to allow the US to fire the opening shot.

China will not be able to impose additional rewards on a scale similar to that of Trump since all US imports to China last year totaled $ 130 billion, compared with exports from China to the US, which was much higher.

However, the trade dispute is already affecting trade between the two countries. For example, China has already canceled orders of 1.1 million tons of soybeans from the US, and Chinese companies are expected to cancel most remaining soybean orders from the US this year.

 

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