Thursday, July 5, 2018

Strap in and buckle up for Trump's trade war with China

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China: United States 'opening fire' on world with tariff threats
China warned July 5 the United States is “opening fire” on the world with its tariff threats.
David J. Lynch, Danielle Paquette and Emily Rauhala
report for the Washington Post
The United States prepared Thursday to impose tariffs upon Chinese goods, a long-threatened move that is expected to prompt Beijing to retaliate against American products and to plunge the two countries into a costly and increasingly unpredictable trade war.
U.S. customs officers will begin imposing duties on $34 billion in Chinese goods beginning at 12:01 a.m. Friday. Chinese officials have said they will respond with equivalent action against a range of American goods, including pork, poultry, soybeans and corn, and President Trump last month vowed to hit an additional $200 billion in Chinese goods if Beijing did so.
Even if eventually reversed, the moves will mark a historic break with nearly a quarter-century of growing integration between the U.S. and Chinese economies. The U.S. tariffs — intended to spare consumers by aiming at industrial products — are designed to force China to drop numerous trade practices that the president says discriminate against U.S. companies.
After months of rhetorical exchanges between Washington and Beijing, the imposition of the new import taxes makes real a conflict that has rattled markets, scrambled corporate supply networks and chilled business investment.
“I don’t think this is going to get resolved easily and I think these tariffs are going to hurt the U.S. economy,” said Rufus Yerxa, president of the National Foreign Trade Council, which represents multinationals such as Coca-Cola, Ford, and Microsoft.
The exchange of tariffs comes as trade-related cracks are beginning to appear in an otherwise robust U.S. economy, according to minutes of the Federal Reserve Board’s most recent meeting June 12 and 13, which were made public Thursday.
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Trump threatens China with tariffs on $200 billion in products
President Trump escalated his trade war with China on June 18, and threatened to put in place tariffs on $200 billion worth of Chinese goods. 
Farmers fear the loss of export sales as U.S. trading partners like China erect trade barriers in response to Trump’s tariffs, while businesses across the country “indicated that plans for capital spending had been scaled back or postponed as a result of uncertainty over trade policy,” the Fed said.

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