{"id":3608,"date":"2018-04-04T08:54:21","date_gmt":"2018-04-04T12:54:21","guid":{"rendered":"http:\/\/lifeinsurance-orleans.ca\/Life-Insurance-Blog\/?guid=53449fcd597a9889fa26013d70db4025"},"modified":"2018-04-04T08:54:21","modified_gmt":"2018-04-04T12:54:21","slug":"chinas-trade-tariff-payback-goes-straight-for-trumps-political-jugular","status":"publish","type":"post","link":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/2018\/04\/04\/chinas-trade-tariff-payback-goes-straight-for-trumps-political-jugular\/","title":{"rendered":"China\u2019s trade tariff payback goes straight for Trump\u2019s political jugular"},"content":{"rendered":"<p>BEIJING\/WASHINGTON \u2014 China hit back quickly on Wednesday against the Trump administration\u2019s plans to slap tariffs on US$50 billion in Chinese goods, retaliating with a list of similar duties on key U.S. imports including soybeans, planes, cars, beef and chemicals.<\/p>\n<p>The speed with which the trade struggle between Washington and Beijing is ratcheting up \u2013 China took less than 11 hours to respond with its own measures \u2013 led to a sharp selloff in global stock markets and commodities.<\/p>\n<p>U.S. President Donald Trump denied that the tit-for-tat moves amounted to a trade war between the world\u2019s two economic superpowers.<\/p>\n<div class=\"embed-twitter\">\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\">\n<p lang=\"en\" dir=\"ltr\">We are not in a trade war with China, that war was lost many years ago by the foolish, or incompetent, people who represented the U.S. Now we have a Trade Deficit of $500 Billion a year, with Intellectual Property Theft of another $300 Billion. We cannot let this continue!<\/p>\n<p>&mdash; Donald J. Trump (@realDonaldTrump) <a href=\"https:\/\/twitter.com\/realDonaldTrump\/status\/981492087328792577?ref_src=twsrc%5Etfw\">April 4, 2018<\/a><\/p>\n<\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/div>\n<p>Investors were wondering, nonetheless, how far one of the worst trade disputes in many years could escalate.<\/p>\n<p>\u201cThe assumption was China would not respond too aggressively and avoid escalating tensions. China\u2019s response is a surprise for some people,\u201d said Julian Evans-Pritchard, Senior China Economist at Capital Economics, noting that neither side had yet called for enforcement of the tariffs.<\/p>\n<p>U.S.-made goods that appear to face added tariffs in China based, on an analysis of Beijing\u2019s list, include Tesla electric cars, Ford\u2019s Lincoln auto models, Gulfstream jets made by General Dynamics and Brown-Forman Corp\u2019s Jack Daniel\u2019s whiskey.<\/p>\n<div class=\"pmYTPlayerContainer video-container\">\n<div id=\"pn_video_65574\"><\/div>\n<\/div>\n<p><script type=\"text\/javascript\">( function() { pnLoadVideo( \"videos\", \"INflKJlk5LM\", \"pn_video_65574\", \"\", \"\", [] ); } )();<\/script><br \/>\nUnlike Washington\u2019s list, which was filled with many obscure industrial items, China\u2019s list strikes at signature U.S. exports, including soybeans, frozen beef, cotton and other key agricultural commodities produced in states from Iowa to Texas that voted for Donald Trump in the 2016 presidential election.<\/p>\n<p>While Washington targeted products that benefit from Chinese industrial policy, including its \u201cMade in China 2025\u201d initiative to replace advanced technology imports with domestic products in strategic industries such as advanced IT and robotics, Beijing\u2019s appears aimed at inflicting political damage.<\/p>\n<p>Tobacco and whiskey, for example, are both on Beijing\u2019s list and are produced in states including Kentucky, home of Senate Majority Leader Mitch McConnell.<\/p>\n<ul class=\"related_links\">\n<li><a href=\"http:\/\/business.financialpost.com\/investing\/global-markets-shares-recoil-as-china-fires-back-in-u-s-trade-war\">Spectre of full-blown trade war returns to wallop world markets<\/a><\/li>\n<li><a href=\"http:\/\/business.financialpost.com\/news\/economy\/how-the-trump-trade-turmoil-could-end-up-benefitting-canada\">How the Trump trade turmoil could end up benefitting Canada<\/a><\/li>\n<\/ul>\n<p>\u201cIt\u2019s more of a game of brinkmanship, making it clear what the cost would be, in the hopes that both sides can come to agreement and none of these tariffs will come into force,\u201d said Evans-Pritchard.<\/p>\n<p>Beijing\u2019s list of 25 per cent additional tariffs on U.S. goods covers 106 items with a trade value matching the US$50 billion targeted on Washington\u2019s list, China\u2019s commerce and finance ministries said.<br \/>\nThe effective date depends on when the U.S. action takes effect.<\/p>\n<p>\u201cThis is a real game changer and moves the trade dispute away from symbolism to measures which would really hurt U.S agricultural exports,\u201d said Commerzbank commodities analyst Carsten Fritsch.<\/p>\n<p>China\u2019s tariff list covers aircraft that would likely include older models such as Boeing Co\u2019s workhorse 737 narrowbody jet, but not newer models like the 737 MAX or its larger planes.<\/p>\n<p>A Beijing-based spokesman for Boeing, the largest single U.S. exporter to China, declined to comment.<br \/>\nBeijing\u2019s announcement triggered heavy selling in global financial markets, with U.S. stock futures sliding 1.5 percent and U.S. soybean futures plunging nearly 5 percent and on track for their biggest fall since July 2016. The dollar briefly extended early losses, while China\u2019s yuan skidded in offshore trade.<\/p>\n<h3>Rapid Response<\/h3>\n<p>Hours earlier, the U.S. government unveiled a detailed breakdown of some 1,300 Chinese industrial, transport and medical goods that could be subject to 25 per cent duties, ranging from light-emitting diodes to machine parts.<\/p>\n<p>The U.S. move, broadly flagged last month, is aimed at forcing Beijing to address what Washington says is deeply entrenched theft of U.S. intellectual property and forced technology transfer from U.S. companies to Chinese competitors, charges Chinese officials deny.<\/p>\n<p>Foreign ministry spokesman Geng Shuang said China had shown sincerity in wanting to resolve the dispute through negotiations.<\/p>\n<p>\u201cBut the best opportunities for resolving the issues through dialog and negotiations have been repeatedly missed by the U.S. side,\u201d he told a regular briefing on Wednesday.<\/p>\n<p>The tariff list from the office of U.S. Trade Representative Robert Lighthizer followed China\u2019s imposition of tariffs on US$3 billion worth of U.S. fruits, nuts, pork and wine to protest at new U.S. steel and aluminum tariffs imposed last month by Trump.<\/p>\n<p>Publication of Washington\u2019s list starts a public comment and consultation period expected to last around two months.<\/p>\n<h3>Will Consumers pay?<\/h3>\n<p>Many consumer electronics products such as cellphones made by Apple Inc and laptops made by Dell were excluded from the U.S. list, as were footwear and clothing, drawing a sigh of relief from retailers who had feared higher costs for American consumers.<\/p>\n<p>A U.S. industry source said the list was somewhat unexpected in that it largely exempts major consumer grade technology products, one of China\u2019s major export categories to the U.S.<\/p>\n<p>\u201cThe tech industry will feel like overall it dodged a bullet,\u201d the source said, but added that traditional industrial goods manufacturers, along with pharmaceuticals and medical device firms, could suffer.<\/p>\n<p>Many U.S. business groups support Trump\u2019s efforts to stop the theft of U.S. intellectual property, but have questioned whether tariffs are the right approach. They warn that disruptions to supply chains that rely on Chinese components will ultimately raise costs for consumers.<\/p>\n<p>\u201cTariffs are one proposed response, but they are likely to create new challenges in the form of significant added costs for manufacturers and American consumers,\u201d National Association of Manufacturers President Jay Timmons said in a statement.<\/p>\n<h3>Algorithm shields U.S. consumers<\/h3>\n<p>USTR developed the tariff targets using a computer algorithm designed to choose products that would inflict maximum pain on Chinese exporters, but limit damage to U.S. consumers.<\/p>\n<p>A USTR official said the list got an initial scrub by removing products identified as likely to cause disruptions to the U.S. economy and those that needed to be excluded for legal reasons.<\/p>\n<p>\u201cThe remaining products were ranked according to the likely impact on U.S. consumers, based on available trade data involving alternative country sources for each product,\u201d the official, who spoke on condition of anonymity, told Reuters.<\/p>\n<p>Many products in those segments appear on the list, including antibiotics and industrial robots and aircraft parts.<\/p>\n<p>USTR did include some key consumer products from China, including flat-panel television sets and motor vehicles, both electric and gasoline-powered, with engines of 3 liters or less.<\/p>\n<p>A Reuters analysis that compared listed products with 2017 Census Bureau import data showed US$3.9 billion in flat-panel TV imports, and US$1.4 billion in vehicle imports from China.<\/p>\n<p>USTR has scheduled a May 15 public hearing on the tariffs, which were announced as the result of an investigation under Section 301 of the 1974 U.S. Trade Act.<\/p>\n<p>China ran a US$375 billion goods trade surplus with the United States in 2017, a figure that Trump has demanded be cut by US$100 billion.<\/p>\n<p>\u00a9 Thomson Reuters 2018<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Beijing&rsquo;s retaliation to U.S. tariffs appears aimed at inflicting political damage<\/p>\n","protected":false},"author":578,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[],"tags":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/3608"}],"collection":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/users\/578"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/comments?post=3608"}],"version-history":[{"count":4,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/3608\/revisions"}],"predecessor-version":[{"id":3656,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/3608\/revisions\/3656"}],"wp:attachment":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/media?parent=3608"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/categories?post=3608"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/tags?post=3608"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}