Tariffs to take effect Friday could impact KC companies

"President Donald Trump dramatically increased pressure on China to reach a trade deal by threatening to hike US tariffs on $200 billion worth of Chinese goods this week and soon target hundreds of billions more".

China's benchmark Shanghai Composite index has closed 5.6% lower after President Donald Trump said he planned to raise tariffs in a dispute with Beijing. They did not offer details.

USA officials did not weigh in on whether China would attend this week's talks. "The 10% will go up to 25% on Friday". Trump's threats raise the risk of a prolonged fight between the world's two largest economies. "It certainly increases the possibility that you'll have no deal".

Some reports said the Chinese were due to send a 100-person delegation to the negotiations. The Trade Deal with China continues, but too slowly, as they attempt to renegotiate, " the president continued.

Trump tweeted yesterday: "The United States has been losing, for many years, 600 to 800 billion dollars a year on trade".

Existing tariffs on Chinese imports consist of 25 percent on $50 billion of high tech and 10 percent on $200 billion dollars of other goods, Trump said in a tweet. US direct investment in China is also high, amounting to more than $107 billion in 2017 alone.

Trump's top trade official, Robert Lighthizer, has also weighed in, accusing Beijing of reneging on promises.

It was unclear whether the threat reflected deeper concerns by Trump, who stunned North Korean leader Kim Jong Un by walking away from their nuclear summit in February, or a negotiating tactic.

A delegation from China will be in Washington on Thursday and Friday and Lighthizer said he expected top Chinese negotiator Vice Premier Liu He will attend.

Dingli sees nothing odd about Trump's use of tweet as a foreign policy instrument although this aspect has been widely criticized in some circles.

The Wall Street Journal, citing unidentified sources, said China's government was considering cancelling this week's talks. "Of course, the effect is catastrophic", said Francis Lun, a stock analyst based in Hong Kong.

Some in China view this as going too far and worry that it would be perceived as a sign of Chinese weakness, according to people familiar with the matter. China poses an enormous challenge to the United States of America.

The VIX, which measures stock market volatility, jumped to its highest level since January. But none of the moves directly addresses American complaints. It's possible that Mr. Trump was considering total exports from China past year, which reached $539 billion.

"If tariffs are hiked this Friday and new tariffs come soon after that the biggest negative impact will likely occur in the next few months", Tao Wang, an economist at UBS, said in a research note. The time is now for China to learn that Americans disagree about many things but on this they stand united.

That's why on websites inside China, virtually nothing about the latest twist in the trade war has been discussed, and some have been making off-track speculations about why the central bank suddenly chose to cut the reserve requirement ratios. The Chinese economy is decelerating. Scott Perry (R-Pa.) said he believes that Trump should go beyond trade itself.

The dollar index, which measures the US currency versus a basket of six major rivals, was little changed at 97.527. Billionaire business magnate and Berkshire Hathaway CEO Warren Buffett said on Monday that "if we actually have a trade war it will be bad for the whole world". "We're optimistic that an agreement can be mutually beneficial". "That is a risky but potentially rewarding strategy - so long as the other side doesn't leave the table".

  • Zachary Reyes