US Moves Toward Tariff Hikes on Another $300 Billion in Chinese Goods
- Author: Leroy Wright Мая 16, 2019,
Мая 16, 2019, 5:12
This could have a great effect on companies that manufacture their laptops, smartphones, tablets or other electronics in China, such as Apple and Microsoft, as well as one company based overseas that ships to the U.S.to sell their products.
Agreeing to US demands to end subsidies and tax breaks for state-owned firms and strategic sectors would also overturn China's state-led economic model and weaken the Communist Party's grip on the economy, they said.
The difference now is Chinese leaders are facing a president who is willing to fight back.
Trump's stance on China may get some breathing room from long-standing bipartisan frustration with Chinese intellectual property theft and currency manipulation. That positivity dissipated as it became evident that the two sides remained far from an agreement, and with no deal forthcoming the United States on May 10 hiked the tariff rate on $200 billion worth of Chinese imports to 25% from 10%.1 Unlike the tariffs imposed on the import of intermediate Chinese goods in July 2018, the items affected by the May hike are split evenly between intermediate goods and consumer goods, increasing the likelihood that United States consumers will bear some of the costs of the increase. USA importers pay the tariffs, and they respond by reducing their profit margins, raising prices, or both. Baughman says the total economic costs on American families will be far higher--the result of a combination of job losses, slower economic growth and a drop in exports due to China's retaliatory tariffs.
China's economy, by contrast, is in trouble.
Authorities have for years been attempting to transition the world's No. 2 economy from being reliant on state investment and exports to a more stable one driven by China's huge army of consumers, with the tariffs standoff reinforcing the need for such a change.
Donald Trump continued to defend his trade war with China on Tuesday, claiming "great patriot farmers" in the United States would benefit from tariff increases that triggered sell-offs in stock markets across the world.
Treasury Secretary Steven Mnuchin said Wednesday that "there's still a lot of work to do" before finalizing a trade deal with China and voiced support for President Trump's use of tariffs. Chinese regulators have instead targeted American companies in China by slowing down the clearing of shipments through customs and the processing of business licenses. 'Our economy is fantastic; theirs is not so good.
Stephen Moore, a conservative economist who Trump nominated to the Federal Reserve board, told the Post, 'I don't see him crying uncle anytime soon'.
Stocks, which took a beating on Monday after Trump late on Friday threatened a new round of tariffs on about $300 billion worth of remaining imports from China, gained strength after Trump's comments, with the tech-driven Nasdaq up 1.47% in midday trade. In April 2018, the growth rate was 1.6 percentage points higher at 7%.
The notice includes 3,805 product categories that could be subject to an additional tariff of up to 25% ad valorem. State ownership is the means by which the Communist Party directs the Chinese economy. Analysts fear a confrontation which started when rising power China challenged the dominance of global economic leader United States of America has now developed into a battle of wills between two of the world's most powerful men.
Barring a collapse of world trade, the worst impact of Trump's economic nationalism may be political. "Our working thesis is that we're going to be in for a period of volatility for most of the next month as we await the G20 meeting".
Three Trump administration officials told Reuters that Trump was expected to delay a decision on imposing tariffs on imported cars and parts by up to six months, avoiding opening yet another front in his global trade battles. Every American should be standing behind the president as he does so - just like Chuck Schumer.