Published: Fri, June 22, 2018
Money | By Wilma Wheeler

Trump determined to hit China as tit-for-tat tariff war erupts

Trump determined to hit China as tit-for-tat tariff war erupts

Oil fell ahead of a possible increase in OPEC crude supply and due to the trade dispute, as it was hurt by the rising dollar and China has threatened to impose tariffs on USA crude exports.

While the threat of a new massive tariff is just that - and the earliest any of those tariffs are set to take effect is July 6 - the Trump administration's antagonistic rhetoric toward China appears to indicate that the battle isn't going to end anytime soon. "Therefore, today, I directed the United States Trade Representative to identify $200 billion worth of Chinese goods for additional tariffs at a rate of 10 percent".

Lower-risk assets gained on the latest round of trade threats. "President Trump has a great relationship with President Xi" Jinping of China.

"China apparently has no intention of changing its unfair practices related to the acquisition of American intellectual property and technology", he said. "Rather than altering those practices, it is now threatening United States companies, workers, and farmers who have done nothing wrong".

That deadline has been extended several times as Canada and Mexico struggle to accommodate far-reaching USA demands for change, such as a sunset clause that would allow one nation to pull out after five years.

The Dow Jones industrials are up 30 points, or 0.1 percent, to 24,730, after falling 287 points Tuesday. Aerospace giant Boeing fell 3.4 percent and DowDuPont slipped 3.3 percent.

"If the USA becomes irrational and issues this list, China will have no choice but to adopt strong countermeasures of the same amount and quality", the ministry statement said. It will impact the global suppliers of goods that are assembled and re-exported from China so many countries will be adversely affected over and above the global steel and aluminium tariffs that have been imposed.

The euro traded at US$1.6165, not far from a recent two-week low of US$1.1543 after the European Central Bank suggested it would hold off raising interest rates through the summer of next year.

Companies that do a lot of business in China were among the biggest losers on the Dow on Tuesday.

Although not part of the US-China trade spat, Europe is looking fragile as growth has already slowed and the fiscal policy is less of a support compared with the US.

China is the largest customer for USA crude, importing about 363,000 barrels a day in the six months ended in March.

The chamber polled 1,195 members for the annual report in February and March, with 532 completing the survey.

In tit-for-tat retaliation last week, the Chinese government made a decision to impose additional duties of 25 per cent on 659 items of United States products worth about Dollars 50 billion. The second list consists of chemicals, medical equipment and energy products, valued at approximately $16 billion.4 As compared with the April list, China added a slew of minerals to the list of products potentially subject to additional duties.

Tariff worries dragged FedEx Corp down 2.0 per cent.

"Further action must be taken to encourage China to change its unfair practices, open its market to U.S. goods, and accept a more balanced trade relationship with the United States", Trump said.

Wall Street has viewed the escalating trade tensions with wariness, fearful they could strangle the economic growth achieved during Mr Trump's watch.

"People living in Canada are coming to the United States and smuggling things back into Canada because the tariffs are so massive", Trump said Tuesday.

"The fundamental reality is that talk is cheap", Navarro told reporters on a conference call, again accusing China of "predatory" trade policies.

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