China set to respond to new round of USA tariffs


In a statement, the USTR said: "The Office of the United States Trade Representative (USTR) today released a list of approximately $16 billion worth of imports from China that will be subject to a 25 percent additional tariff as part of the US response to China's unfair trade practices related to the forced transfer of American technology and intellectual property".

Even as Trump's approach to China thus far bears little fruit, administration officials say they are optimistic they will be able to announce by the end of this week agreement with Mexico on key elements of a new North American trade deal.

In July, both countries slapped duties on $34 billion of each other imports, with Washington firing first. This, however, had been held up as Beijing rejigged its film regulator, handing more control to the ruling Communist Party, and then as trade tensions with the United States grew, Reuters reported. China retaliated with higher duties on a similar amount of American goods.

In January 2018, Trump exercised his authority under Section 201 of the Trade Act of 1974 to provide safeguard relief to US manufacturers injured by imports of washing machines and solar panels.

The slight pick-up likely reflected some teapot plants returning from maintenance, while refining margins also improved thanks to higher domestic fuel prices, said James Gao of consultancy China Sublime Information Group.

Exports to the rest of the world may have been helped by a weaker Chinese currency. Trump has also begun to move forward with tariffs on another $200 billion worth of Chinese goods, and he has effectively threatened that every item from the country could eventually be subject to tariffs.

China's refined products exports last month were 4.57 million tonnes, almost flat from a year earlier.

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A container ship sails into Hong Kong, China July 11, 2018. In MSI's view, early indications from US ports and bills of lading processing suggest that June import volumes surged, perhaps suggesting panic-buying as the trade war scenario worsened.

The government has responded by releasing more liquidity into the banking system, encouraging lending and promising a more "active" fiscal policy.

While Trump is claiming the USA is "winning" the trade war because of growing problems in the Chinese economy, the prospect of a significant downturn is striking fear among many countries in South East Asia that are dependent on Chinese markets.

In a sign there may be more difficulties ahead, a private survey last week found that the business outlook among Chinese services firms was the second-weakest on record in July in part due worries about the trade war.

Take the list of 16 billion dollars' worth of Chinese exports to the United States as an example.

"We'll know China is really feeling the pressure when they start stirring nationalist sentiment or calling for boycotts against USA", said Bruce Andrews, managing director of Rock Creek Global Advisors. And President Donald Trump has threatened to impose tariffs on virtually everything China sells to the United States.

However, it was absolutely not the case that China brought this upon itself, the commentary said. That was in retaliation against USA plans to begin collecting 25 per cent extra in tariffs on US$16 billion of Chinese goods from August 23. The list is heavy on industrial products such as steam turbines and iron girders.