China-US trade war heats up

  • China-US trade war heats up

China-US trade war heats up

The Chinese list Wednesday included soybeans, the biggest US export to China, and aircraft up to 45 tons (41 metric tons) in weight.

"We believe that the good global economy growth in 2018 should lead to higher consumption per capita". Instead, China retaliated with $3 billion in tariffs of its own against 128 American exports including agricultural products and steel pipe on April 2nd. Small and mid-size American hog farmers would be devasted under the new tariffs as the price farmers are paid per pound for their pigs at the sale barns would go down, while consumers would pay more per pound for pork as meat packing plants pass the increase on to consumers at grocers.

China is the largest market for US soy and the threat of tariffs on exports of the commodity has the potential to whip up trade anxieties in stalwart Republican areas.

Despite promises from the Trump administration, these tariffs will not "fix" the trade deficit. China may respond by selling U.S. Treasuries, currency devaluation, or seeking a rare earth ban. Both imports from China and exports to China will decline, leaving the trade balance unaffected but reducing overall trade flows and the lower prices and gains from specialization that trade delivers.

"Our counter-measures were necessary and sufficient", Wang Yi said, adding they were "a legitimate defence of our interests and our rights".

The USTR's "Section 301" investigation authorizing the tariffs alleges China has systematically sought to misappropriate US intellectual property through joint venture requirements that often can not be negotiated without technology transfers, something China denies.

"One guilty party in all of this are USA firms themselves, many of whom have actively assisted in "voluntary" technology transfer through joint ventures in order to access China's domestic market", adds Baptist.

"The American public has always been ambivalent about trade and agrees other countries have taken advantage of the USA while seeing lower prices", Penn said.

Given the global mood, developing countries that are relatively insulated from the global economy and boast large domestic markets could do better than key exporters for now.

He also remarked that the United States might be in for unforeseen consequences it would definitely want to avoid, as China's new Silk Road concept may end up strengthening the European economy.

But despite a 2012 WTO ruling that China was discriminating against foreign payment card companies, no USA firm has yet been granted a license.

The Chinese government said it has "heard what the USA has said" about tariffs and is monitoring the USA government's next moves. Other U.S. carmakers such as General Motors and Ford Motor also manufacture in China.

"A (full-blown) trade war meanwhile would have a more pronounced effect".