Mar 26 2018 by Johnnie Parsons
China's commerce ministry warned that a 15 percent tariff on 120 goods worth nearly $1 billion-including fresh fruit, nuts and wine-would be imposed if the USA fails to reach a "trade compensation agreement" within an unspecified timeframe. It urged Washington to negotiate a settlement but set no deadline.
The move on tariffs is only the latest case of Trump undermining the WTO. "There is a very clear structure to resolve disputes, and if countries start going their own way trying to resolve them, we could end up in a chaotic situation with regards to global trade that won't be beneficial to anybody", he said in an e-mail today.
On the economic front, the United States new orders for manufactured durable goods in February increased $7.4 billion, or 3.1 per cent, to $247.7 billion, the Commerce Department said on Friday.
The ratcheting up of tensions sent a shiver through world financial markets.
The dollar dipped to 104.90 yen as investors shifted into the Japanese currency, which is viewed as a "safe haven" from risk.
Meanwhile, American stocks sank again for the second straight day, giving Wall Street its worst week in two years, as fear gripped investors that China and the USA were headed for a trade war. But these are technically responses to USA global steel and aluminum tariffs, not the Trump administration's anti-China tariffs over intellectual property practices.
The United States has flouted trade rules with an inquiry into intellectual property and China will defend its interests, Vice Premier Liu He told U.S. Treasury Secretary Steven Mnuchin in a telephone call on Saturday, Chinese state media reported. China has become the world's largest walnut producer, for example, according to the U.S. Agriculture Department.
His fear involves America's treasure trove of corporate research being taken by China - by its spies, by its state-funded corporate takeovers, and by forced mergers and technology transfers as the cost of doing business with Beijing.
But Lighthizer said the USA can impose costs on certain behaviours and try to mitigate their impact: "We can at least be in a position where USA industry isn't wiped out".
The country's regulatory regime is still highly restrictive, says Atlanta-based UPS, which entered China 30 years ago through a joint venture agreement and took ownership of its business there in 2005.
"Until the Trump administration articulates those concerns and how China can address them, it's going to be very, very hard for China to make those changes", said Parker.
Big US companies tend to get more of their revenue from foreign customers than small companies do, and that makes them more vulnerable to damage from a trade war.
The United States had a record $375.2 billion goods trade deficit with China previous year.
The official cited Beijing's "Made in China 2025" plan as "hugely problematic".
China has drawn a list of 128 USA products that could be hit with tariffs if the two countries are unable to reach an agreement on trade issues, the ministry said. A second list of goods including wine, apples, ethanol and stainless steel pipe would be charged 15 percent. "There's a long-term pattern of behavior by the Chinese government to the detriment" of US companies, the USA official said at a briefing.
Trump said South Korea was listed because of its important security relationship with the United States, "including our shared commitment to eliminating the North Korean nuclear threat".
So how will this affect us as consumers when we go shopping?
Nancy Pelosi, a Democrat who is the US House leader, praised Trump for being "strong, smart and [taking] strategic action against China's brazenly unfair trade policies".
Responding to questions, the official said the concerns with Chinese economic practices are widespread throughout the United States and around the world. In December 2017, China imported 22 million gallons of US ethanol, accounting for 13 percent of USA exports that month. Effectively, those tariffs apply only to three major steel exporters-China, Russia and Japan.
But those products remain only occasional purchases for many Chinese households.
The impact on other American companies would be widespread, fanning out across the USA because of the intricate links with global supply chains.
In a world where all economies are closely interdependent, and the USA move will also affect Germany and the European Union as a effect, Wansleben added.
Washington:President Donald Trump will impose tariffs on about $50 billion in Chinese goods imports to retaliate against the alleged theft of American intellectual property, White House officials said.
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