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China hikes tariffs on most U.S. goods in $60 billion target list

"We're taking in right now hundreds of billions of dollars, we've taken in billions of dollars of tariffs", said Trump of USA tariffs on China that raised from ten to 25 percent last Friday on $200 billion in Chinese goods. Brent crude gained 0.07% to $70.28 per barrel.

In a series of tweets on Monday, Trump said China had "taken so advantage of the United States for so many years".

President Donald Trump and China's President Xi Jinping meet business leaders at the Great Hall of the People in Beijing, China, Nov. 9, 2017. Just $5 a month. You had a great deal, nearly completed, & you backed out!' Trump wrote on Twitter.

"I say openly to President Xi and all of my many friends in China that China will be hurt very badly if you don't make a deal because companies will be forced to leave China for other countries", Trump said.

But China will not be bullied, he added. "Would be wise for them to act now, but love collecting BIG TARIFFS!"

He added that U.S. consumers could avoid the tariffs by buying the same products from other sources.

"Such an easy way to avoid Tariffs?"

"We're in a very good position and I think it's only going to get better", said Trump. After Friday's tariff increase, the United States now is imposing 25% taxes on $250 billion in Chinese goods.

Punitive charges of 5% to 25% on thousands of American products including batteries, spinach and coffee will take effect June 1, the Finance Ministry said.

US tariffs past year triggered retaliation by China, which imposed 25% levies on $50 billion worth of USA products including soybeans, beef and pork and lower tariffs on a list of $60 billion in goods.

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Stocks plunged in trading Monday after China announced retaliatory tariffs on USA goods and as prospects for a deal to avert a trade war seemed more remote.

"China's adjustment on additional tariffs is a response to US unilateralism and protectionism", the ministry said. Beijing said then it wouldn't take action until the USA increases took effect, which finally happened on Friday. The U.S. slapped China with $200 billion in tariffs after failed trade talks last week, while China retaliated with $60 billion in retaliatory tariffs over their own. China wants them lifted; the USA wants to keep tariffs as leverage to pressure the Chinese to comply with any agreement.

Going forward, however, the fallout from increased tariffs on Chinese goods will dampen global oil demand, as well as cause more stagnation in global growth, while Trump's indication that he could impose new tariffs on another $300 bn worth of Chinese goods could be severely damaging for global growth, especially still fragile emerging markets.

Yet analysts warn that markets could become far less sanguine should trade tensions escalate.

Beijing announced shortly after that it was hitting over 5,000 categories of U.S. products with tariffs of five to 10 percent.

For Asian markets, Hong Kong's Hang Seng index could drop by around 3 percent, while Shanghai stocks could dip by as much as 8 percent, Morgan Stanley calculates.

The prospect that the United States and China were spiralling into a no-holds-barred dispute that could derail the global economy has rattled investors and led to a sharp selloff on equities markets in the past week.

"We appear to be in a slow-motion train wreck, with both sides sticking to their positions", said William Reinsch, a trade analyst at the Center for Strategic and International Studies and a former USA trade official.

According to Hunter, even a major escalation "would still add only a few tenths of a percent to U.S. consumer price inflation", which is already below the U.S. Federal Reserve's 2 percent target. Nasdaq 100 futures sank 2.8 percent. The benchmark index is coming off its worst week since January, though it's still up sharply for the year.

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