Trump ups ante, threatens tariffs on $100bn of Chinese goods
- Author: Fernando Stephens Apr 07, 2018,
Apr 07, 2018, 6:31
After Trump ordered his administration to consider tariffs on an additional $100 billion in Chinese goods on Thursday, sending USA stock futures tumbling, China's Commerce Ministry said in a statement in Beijing on Friday that the nation doesn't want a trade war, but is ready to fight one.
Meanwhile, there had been rumblings the United States was preparing to slap between $50bn and $60bn worth of tariffs on Chinese-made goods in response to unfair Chinese intellectual property practices, such as those that pressure USA companies to share technology with Chinese firms. "We are on a unsafe downward spiral and American families will be on the losing end".
Most U.S. equity indexes are grinding through choppy corrections after falling 10 percent or more from their record highs earlier in the year.
The dollar fell in Friday's trade, while US stock futures and most of Asia's stock markets were in the red. Chinese markets were closed for a holiday.
"We pay the highest tariffs on average of any product", Steve Lamar, executive vice president of the American Apparel and Footwear Association, told CBS MoneyWatch last week. China responded by imposing similar measures on $3 billion worth of USA pork, fruit and other items. "We represent 6 percent of the imports but account for 51 percent of the tariffs".
But Trump granted Europe a last-minute exemption, giving European Union negotiators until May 1 to come up with a solution to unfair trade policies alleged by the U.S. leader.
"China created this problem, not President Trump".
"This latest intimidation reflects the deep arrogance of some American elites in their attitude towards China", the state-run Global Times said in an editorial. "I don't like to use them, but sometimes you have to use tariffs to bring countries to their senses". If China were to match tariffs on another $100 billion in USA exports on top of the 50 billion they were already threatening, that would basically be tariffs on every last item that the US sends to China.
"China's illicit trade practices - ignored for years by Washington - have destroyed thousands of American factories and millions of American jobs", Mr Trump said in a statement announcing the decision. While the USA added 103,000 jobs in March, roughly 70,000 fewer than expected, the undershoot is due in part to rough winter weather suppressing construction.
He also said the tariffs, like those previously announced, would undergo a review period before going into effect, leaving the door open for talks. Ben Sasse, R-Neb., a frequent Trump critic, called the escalation "the dumbest possible way" to punish China.
The U.S. Department of Agriculture told Reuters after the president's statement that it first needs to "see the reaction of what tariffs will be and what the reaction of markets are" in deciding on ways to shield farmers from the trade conflict. I want to bring in NPR White House correspondent Scott Horsley.
Since late March, China and the United States have exchanged ever-escalating threats.
But trade tensions with China show no sign of letting up. China said the USA fired the first salvo with its tariff threats.
The U.S. tariffs are aimed at forcing changes to Chinese government policies created to transfer U.S. intellectual property to Chinese companies and allow them to seize leadership in key high-technology industries of the future.
Trump's newly installed chief economic adviser, Larry Kudlow, and other administration officials have spent the past two days trying to tamp down fears of a trade war.
Infographic explaining tariffs (left), and a chart showing US tariffs since 1821 (right). He says he hopes differences can be mended through negotiations.
But in the hours that followed, markets across Asia Pacific, including Hong Kong, held steady, the Communist Party-controlled press said little, and top officials were mum.
Many of USA farmers could then be forced to switch to other crops - very few of which are as lucrative.Soybean producing areas in the U.S. are filled with famers who voted for Mr Trump, and so some of them are now less than happy with their president.
EARLY LOSERS: Industrial companies might face the worst pain from tariffs, as they could find themselves dealing with higher costs for components imported into the US while the duties on their goods in China harm their sales.