quote:

China vows to retaliate as US threatens tariffs on further $200bn of goods

Trade skirmish continues to escalate between world’s two biggest economies

The Trump administration has said it would slap 10% tariffs on an extra $200bn worth of Chinese imports, prompting Beijing to promise to “fight back as usual” in an announcement that brings the two countries closer to the brink of a full-out trade war .

The administration released a wide-ranging list of Chinese goods it proposes be hit with tariffs, including hundreds of food products as well as tobacco, coal, chemicals and tyres, dog and cat food, and consumer electronics including television components.

“For over a year, the Trump administration has patiently urged China to stop its unfair practices, open its market, and engage in true market competition,” US trade representative Robert Lighthizer said in announcing the proposed tariffs on Tuesday night.

“Rather than address our legitimate concerns, China has begun to retaliate against US products ... There is no justification for such action,” he said in a statement.

On Wednesday, China responded to the proposed tariffs, which would be on top of two other rounds by saying “irrational US actions” were hurting the world as well as the US. Officials said China would seek support from the international community to resist “trade hegemony.”

“China is shocked by US’ behaviour. In order to safeguard the core interests of the country and the people, China will have to fight back as usual,” China’s ministry of commerce said in a statement.

In Beijing, Li Chenggang, assistant minister at the ministry, said at a forum in Beijing that the latest US proposals interfered with the globalisation of the world economy and that China’s support for a multilateral trade system would not change.

After months of negotiations, last week Washington imposed 25% tariffs on $34bn of Chinese imports, and Beijing responded immediately with matching tariffs on the same amount of US exports to China.

China has repeatedly said it is more prepared for a trade war than the US. An English-language editorial in the state-run China Daily said, “If Trump launches an all-out trade war, the US economy and society may not be able to withstand the impact of countermeasures from China and other economies.”

Yet Chinese investors and companies have been worried about a trade war between the world’s two largest economies. Ahead of the tariffs implemented last week, the Shanghai Composite had fallen to a two-year low.

On Wednesday, the Shanghai Composite index fell 2.1%, while the CSI300 index of major Shanghai and Shenzhen stocks fell 2%. Hong Kong’s Hang Seng index was down 1.4% in midday trading.

Earlier on Wednesday, after the White House’s announcement, South Korea’s KOSPI lost 1% and Japan’s Nikkei fell 1.2%. The offshore yuan fell more than 0.5% in early trading. Dow Jones mini futures fell as much as 1% while S&P500 e-mini futures, the world’s most liquid futures, were down 0.8%.

The new round of tariffs would not go into effect for another two months, leaving time for public comments. Ma Jun, a former economist at China’s central bank, told Xinhua, “There are still all kinds of uncertainty over whether the tariffs will be imposed and on what products.”

Donald Trump has said he might ultimately impose tariffs on more than $500bn worth of Chinese goods – roughly the total amount of US imports from China last year. There are currently no signs of talks between the two sides.

Some US business groups and senior lawmakers criticised the latest action on Tuesday, with Senate finance committee chairman Orrin Hatch, a Republican, saying it “appears reckless and is not a targeted approach”.

The US chamber of commerce, which has supported Trump’s tax cuts and efforts to reduce regulation of businesses, also criticised the administration’s move.

“Tariffs are taxes, plain and simple. Imposing taxes on another $200bn worth of products will raise the costs of everyday goods for American families, farmers, ranchers, workers, and job creators. It will also result in retaliatory tariffs, further hurting American workers,” a chamber spokeswoman said.

The Retail Industry Leaders Association, a lobby group representing the largest US retailers, said: “The president has broken his promise to bring maximum pain on China, minimum pain on consumers.”

“American families are the ones being punished. Consumers, businesses and the American jobs dependent on trade, are left in the crosshairs of an escalating global trade war,” said Hun Quach, the head of international trade policy for the group.

quote:

Trump threatens car tariffs after EU sets up £2.5bn of levies on US

Bourbon whiskey, Levi’s and Harley-Davidson on list as EU measures comes into force

Donald Trump has threatened to widen the mounting trade dispute between US and the EU by imposing tariffs on European cars, after Brussels made good on its threat of retaliatory levies on American products including bourbon whiskey, Levi’s jeans and Harley-Davidson motorbikes.

Raising the stakes in the tit-for-tat exchange of import tariffs threatening to spark a global trade war, the US president tweeted in response to the EU tariffs which came into effect late on Thursday: “If these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the U.S. Build them here!”

Trump’s new threat comes after the EU imposed tariffs on a range of US consumer goods in response to steel and aluminium tariffs from the White House, which could increase the cost of consumer goods by £200m per year in the UK alone.

Should Trump carry through the levy, it would have damaging consequences for jobs and economic growth on both sides of the Atlantic. Leaders from American and European car manufacturers have previously said such measures would lead to net job losses in the US.

The US is the biggest market for EU car exports, accounting for 25% of the €48bn (£42bn) total in 2016, when Germany accounted for just over half of all EU car exports and the UK had the second biggest share, at 13%.

The US opened a new front in the trade war on Friday, telling the World Trade Organisation that appeals rulings in trade disputes could be vetoed if they took longer than the allowed 90 days.

The statement by the US ambassador, Dennis Shea, threatened to erode a key element of trade enforcement at the 23-year-old WTO: binding dispute settlement, which is widely seen as a major bulwark against protectionism.

The tariffs from Brussels imposed on consumer goods – designed to target producers in Republican states where Trump draws much of his support – were introduced from 11pm (BST) on Thursday on US goods worth up to €2.8bn (£2.5bn).

The White House had refused to exempt its traditional allies from worldwide tariffs on steel and aluminium, which Trump argues are necessary to protect US jobs and industry. The president is also threatening China with tariffs worth up to $200bn over alleged “unfair” trading practices.

The EU trade commissioner, Cecilia Malmström, said this week the 28-nation bloc was left with no other choice but to impose tariffs of its own after the “unilateral and unjustified decision of the US”.

Brussels drew up the list of products in March when Trump first floated the idea of 25% tariffs on steel and 10% on aluminium.

Although American goods already in the UK will not increase in price, shipments leaving the US for Europe from Friday onwards will be charged the tariffs.

Customs agents across the EU internal market of 500 million people will impose the duty, hiking prices on US-made products in supermarkets and across factory floors.

The EU tax on imported goods in the UK will be collected by HM Revenue & Customs, with some of those duties staying within the country, but the cost for importers, such as wholesale firms and supermarkets, will rise and is likely to be passed on to consumers.

Richard Lim, the chief executive of the consultancy Retail Economics, estimated the tariffs could add £200m to the cost of consumer goods in Britain. In 2017, consumers in the UK spent about £406bn on retail purchases.

“Though the immediate effects on UK retailers might look relatively modest, it is worth paying close attention to this dispute because it’s future course is unpredictable, fast moving and could quickly escalate to engulf other, seemingly unrelated areas of trade,” he said.

Most economists say the consequence of higher international import tariffs will drive up costs for consumers, offsetting much of the benefit of protecting domestic industries for the country imposing them.

Analysts at the Oxford Economics consultancy said the consequences for the European economy could be contained in the short term, as the affected imports only account for about 1% of all goods coming into the EU from the US, although it warned tariffs on cars would have a greater negative impact. The EU will impose an additional €3.6bn of tariffs if the dispute is still active in three years’ time.

European consumers would be able to find alternatives, said the European commission vice-president for trade, Jyrki Katainen. “If we chose products like Harley-Davidson, peanut butter and bourbon, it’s because there are alternatives on the market. We don’t want to do anything that would harm consumers,” he said. “What’s more, these products will have a strong symbolic political impact.”

botany posted:

something i'm not entirely clear on: would the proposed tariffs on cars hit the sales of EU-manufactured cars or only the imports? because as far as german cars are concerned, the majority of them are manufactured in the US. in 2017, 1.35 million german cars were sold to the US, but only <500k of them were imported, the rest were manufactured in the US. (that tendency is rising, by the way, each year more and more german cars are manufactured in the US.) would those be hit by the tariffs as well?

also thanks for making the thread, it's nice to have all this in one place

botany posted:

something i'm not entirely clear on: would the proposed tariffs on cars hit the sales of EU-manufactured cars or only the imports? because as far as german cars are concerned, the majority of them are manufactured in the US. in 2017, 1.35 million german cars were sold to the US, but only <500k of them were imported, the rest were manufactured in the US. (that tendency is rising, by the way, each year more and more german cars are manufactured in the US.) would those be hit by the tariffs as well?

also thanks for making the thread, it's nice to have all this in one place

Xander77 posted:

Can someone give a quick and quotable expalantion of how trade deficits and trade wars actually work? Like an Adam Smith excerpt or something.

Orange Devil posted:

Going to guess it'll be all of them because:

A) That's the dumbest possible option

and

B) Trump will go into a frothy rage every time he sees a Mercedes or BMW logo and details like place of manufacture are a lot more complicated than "symbol = bad"

tino posted:

Minimum of half year because it takes time for the trade war effect to reach the people (who for the most part, wanted a trade war and thought the US can win a trade war). Maximum of 1 year because the Americans life style simply don't have reserve to out last the Chinese. Not to mention the Chinese people don't have the option to choose vote out a trade warmonger.

Junior G-man posted:

Xander77 posted:

Sorry if I was unclear. I wasn't talking about "if you slap tariffs on us, we'll slap tariffs on you".

I'm talking about the basic premise of "if we have a trade deficit with someone, that someone is taking advantage of us".

Roumba posted:

What the gently caress threadbare national security argument is being shat out to cover soap and cat food? Did he even remember to bother with that fig leaf this time or has Congress become so utterly terrified of even pretending like they disapprove of this man with two assholes and his lunatic base that nothing will be done?

botany posted:

something i'm not entirely clear on: would the proposed tariffs on cars hit the sales of EU-manufactured cars or only the imports? because as far as german cars are concerned, the majority of them are manufactured in the US. in 2017, 1.35 million german cars were sold to the US, but only <500k of them were imported, the rest were manufactured in the US. (that tendency is rising, by the way, each year more and more german cars are manufactured in the US.) would those be hit by the tariffs as well?

also thanks for making the thread, it's nice to have all this in one place

Xander77 posted:

Sorry if I was unclear. I wasn't talking about "if you slap tariffs on us, we'll slap tariffs on you".

I'm talking about the basic premise of "if we have a trade deficit with someone, that someone is taking advantage of us".

Xander77 posted:

Sorry if I was unclear. I wasn't talking about "if you slap tariffs on us, we'll slap tariffs on you".

I'm talking about the basic premise of "if we have a trade deficit with someone, that someone is taking advantage of us".

Roumba posted:

What the gently caress threadbare national security argument is being shat out to cover soap and cat food? Did he even remember to bother with that fig leaf this time or has Congress become so utterly terrified of even pretending like they disapprove of this man with two assholes and his lunatic base that nothing will be done?

Xequecal posted:

There's actually a legal reason for this. Trump is only allowed to unilaterally impose tariffs for national security reasons. However, the courts are only allowed a facial analysis of the President's motivations when it comes to these kinds of edicts on foreign countries. They cannot accept other evidence. So as far as the courts are concerned, it's about national security if the President says it is. He cannot be second guessed. The SCOTUS upheld the travel ban on the same principle, lower courts took into consideration his campaign trail comments and other things to determine it was a Muslim ban. The 5-4 decision striking it down said this is not allowed, only a facial analysis can be done, so It's not a Muslim ban unless the President says it is.

He has to say national security because the courts can void his tariffs if he doesn't, but as long as he says the magic words, the courts can't even consider a legal challenge. Every tariff he ever imposes will be done for "national security" for this reason.

tino posted:

So can congress close this loop hole? I mean I am all for destroying the red districts.

tino posted:

So can congress close this loop hole? I mean I am all for destroying the red districts.

Xand_Man posted:

Not sure they need 67 Ds, Trump's tariffs haven't been going over great with the business wing of the GOP

luxury handset posted:

yeah but the senate republicans are massive cowards and none of them want to be the first to disobey daddy trump

this appears to be today's good article from the new york times:

https://www.nytimes.com/interactive/2018/07/11/business/trade-war.html

Xequecal posted:

This kind of thing totally misunderstands the impetus for tariffs under Trump's brand of nationalism. Under Trump's nationalism, everyone else in the world is the enemy. With that assumption, even mutually destructive tariffs are rational, as long as they hurt everyone else more than they hurt you. We're not supposed to be benefiting from the tariffs now, the supposed benefits come when everyone else in the world surrenders and comes to Trump on their knees.

luxury handset posted:

are we trying to explain trump's abusive broke brain and how it will fail to come into contact with reality, or are we trying to explain what is actually happening - that the united states is purposely initiating a corrosive trade war that will cripple its economy if left unchecked. i mean is this an economics thread or a psychology thread

Squalid posted:

How harmful is dumping really in a macro economic sense? Because it sounds an awful lot like a sale, to put it in other terms. Although I guess if you’re worried about national security having the Chinese out compete all of your domestic steel production would be bad, but it seems like it should actually be better for the buyer than seller.

Squalid posted:

How harmful is dumping really in a macro economic sense? Because it sounds an awful lot like a sale, to put it in other terms. Although I guess if you’re worried about national security having the Chinese out compete all of your domestic steel production would be bad, but it seems like it should actually be better for the buyer than seller.

Squalid posted:

How harmful is dumping really in a macro economic sense? Because it sounds an awful lot like a sale, to put it in other terms. Although I guess if you’re worried about national security having the Chinese out compete all of your domestic steel production would be bad, but it seems like it should actually be better for the buyer than seller.

Xequecal posted:

These articles throw out how the US isn't benefiting from the trade war right now like it's some kind of epiphany that nobody comprehends. I mean, no poo poo, of course we're not benefiting from it now as long as everyone is willing to match our tariffs with their own. The idea is eventually they won't be willing to, and at that point we win. Now, I think that the US has basically zero chance to win a misery war against loving China and this will eventually backfire horribly, but stuff like that article just misses the point entirely.

Squalid posted:

How harmful is dumping really in a macro economic sense? Because it sounds an awful lot like a sale, to put it in other terms. Although I guess if you’re worried about national security having the Chinese out compete all of your domestic steel production would be bad, but it seems like it should actually be better for the buyer than seller.

mobby_6kl posted:

The upside to dumping is that you get goods very cheaply, subsidized by the offending government sooo

Squalid posted:

Do we have any real life examples of dumping being used to shut down rival industries and then increase prices? I’m curious how these disputes work in practice. If the result is the same as monopolistic behavior by private industry of course it should be constrained.

qkkl posted:

is China tariffs though are legitimately for national security reasons since China's plan has been to dump extremely under-priced goods in the US to damage their domestic manufacturing to the point of non-existence, at which point China would heavily increase those prices, and the US would be forced to buy the now over-priced goods from China because it can't make the products at home anymore.