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China Trade Talks Come to Halt

13 Juillet 2018

The statement issued by Lighthizer was that of an imperial overlord whose word is law, to be obeyed without question, with any opposition to be met by escalating reprisals.

But Tuesday's list includes food and agricultural products, handbags, hats and furniture - a group of items that, by themselves, account for almost one-quarter of the $200 billion in Chinese goods that would be subject to the new proposed tariffs, according to data compiled by trade research firm Panjiva.

"This is an appropriate response under the authority of Section 301 to obtain the elimination of China's harmful industrial policies", Robert Lighthizer, the USA trade representative (USTR), said.

The U.S. dollar strengthened against the Japanese yen on Wednesday as trade tensions mounted and after the Labor Department's expectation-beating inflation report, which increased prospects that the Federal Reserve will raise interest rates another two times this year.

A Chinese Commerce Ministry statement, issued Wednesday following the Trump administration announcement, said China was "shocked" at the US plans to levy the 10% tariffs.

However, signs of a possible thaw emerged on July 5 when the USA ambassador in Berlin told bosses at Germany's biggest auto firms that Washington was calling on the European Union to bring tariffs to zero on vehicle imports - in exchange for equal treatment.

"Unilateral actions that alienate long-standing USA allies and close off the US market to the rest of the world are not a recipe for economic growth and prosperity and are very unlikely to change China's unfair practices", ACC said. China immediately retaliated with tariffs on its own list of $34 billion worth of American goods.

It's now safe to say that a trade war is underway between the United States and China.

Beijing has said it would hit back against Washington's escalating tariff measures, including through "qualitative measures", a threat that US businesses in China fear could mean anything from stepped-up inspections to delays in investment approvals and even consumer boycotts. "There is no justification for such action", Mr Lighthizer said.

So far, many Americans are enjoying a solid economy and haven't felt an impact from Trump's trade fights. Beijing offered to boost United States exports to China, particularly of agriculture and energy products, by around $100 billion, but this was dismissed by Trump and his officials as not addressing the central issues.

"Grocery stores and restaurants thrive when they offer the public options", he said.

"When exposing and criticizing American words and actions, be careful not to link it to Trump and instead to aim it at the US government", a memo based on verbal instructions from government officials reads. "The US side ignored the progress, adopted unilateral and protectionist measures, and started the trade war".

The dispute between China and the United States comes on top of Washington's confrontation with other allies and major trading partners including Canada, Mexico and the European Union, after it imposed steep tariffs on their steel and aluminum.

"Other countries' trade barriers and tariffs have been destroying their businesses". Both trends would slow economic growth. But with only $130 billion in goods coming in from America, the Chinese wouldn't even be able to match the $200 billion figure, much less anything above that. "Although I have supported the administration's targeted efforts to combat China's technology transfer regime, tonight's announcement appears to be reckless and is not a targeted approach". "America has China's attention, so instead of more tariffs, the USA and China should immediately begin working toward a fair, bilateral, enforceable, rules-based trade agreement to end China's market-distorting activities".

Coors Brewing is on the record saying they believe the trade war will impact the price of beer.

Guan Tao, a senior researcher at the Beijing-based think tank China Finance 40 Forum, said this will bring negative short-term sentiment to the financial market, but that it should not be overestimated.

He said Donald Trump has a challenge ahead.

The lopsided export balance between the two countries acts as a bargaining chip for the U.S. in when it comes to tariffs. "China cheats, and manufacturers want to see China held accountable".

Business leaders have been warning that if China didn't take real measures to address a lack of reciprocal market openness, it would sow retaliatory sentiment among its largest trading partners.

"The US closed the door for negotiations", Mr Li said. The Trump administration has so far rejected Chinese offers to trim its massive trade surplus by buying more American goods, and is demanding more systemic change.

China Trade Talks Come to Halt