China responds to Trump tariffs with proposed list of 128 US products to target
Nyshka Chandran
March 23, 2018
The world's second-largest economy has responded to President Donald Trump's controversial trade tariffs.
China's commerce ministry proposed a list of 128 U.S. products as potential retaliation targets, according to a statement on its website posted Friday morning.
The U.S. goods, which had an import value of $3 billion in 2017, include wine, fresh fruit, dried fruit and nuts, steel pipes, modified ethanol, and ginseng, the ministry said. Those products could see a 15 percent duty, while a 25 percent tariff could be imposed on U.S. pork and recycled aluminium goods, according to the statement.
More details in
https://www.cnbc.com/2018/03/22/china-re...arget.html
(23-03-2018, 01:52 PM)cyclone Wrote: [ -> ]China responds to Trump tariffs with proposed list of 128 US products to target
Nyshka Chandran
March 23, 2018
The world's second-largest economy has responded to President Donald Trump's controversial trade tariffs.
China's commerce ministry proposed a list of 128 U.S. products as potential retaliation targets, according to a statement on its website posted Friday morning.
The U.S. goods, which had an import value of $3 billion in 2017, include wine, fresh fruit, dried fruit and nuts, steel pipes, modified ethanol, and ginseng, the ministry said. Those products could see a 15 percent duty, while a 25 percent tariff could be imposed on U.S. pork and recycled aluminium goods, according to the statement.
More details in https://www.cnbc.com/2018/03/22/china-re...arget.html
and today China threaten to sell US treasuries. If China were to do that, without the backing of those treasuries, their funding costs are gonna start to skyrocket, and their currency will start appreciating as fund outflow goes back to China, making their exports expensive and impact their export based economy.
https://www.bloomberg.com/news/articles/...-purchases
Besides for foodstuffs, chinese are likely to continue buying the expensive high end foodstuffs due to safety concerns of their local food. $3billion vs 50billion+ threatened by Trump, looks like Trump got them by the balls with this move.
Chances are China will back down to allow their economic to mature and grow for few more decades.
Basically I feel PRC got a lot more to lose and their development derailed if they are to do otherwise.
(24-03-2018, 04:08 PM)corydorus Wrote: [ -> ]Chances are China will back down to allow their economic to mature and grow for few more decades.
Basically I feel PRC got a lot more to lose and their development derailed if they are to do otherwise.
China's economy is actually a house of cards at the moment. Their banks, zombie state companies and mega size property developers all depend on the constant creation of new credit to keep stable. Any distruption of their economy will mean disruption to this credit creation and result in higher funding costs and could potentially cause a big uncontrollable deleveraging in their markets.
Also China is only ~8% of US exports which is not that significant overall.
https://wits.worldbank.org/CountrySnapsh...A/textview
The top five countries to which United States exported 2016 along with the partner share in percentage are:
- United States exports to Canada worth US$ 266,765 million, with a partner share of 18.39 percent.
- United States exports to Mexico worth US$ 229,702 million, with a partner share of 15.84 percent.
- United States exports to China worth US$ 115,602 million, with a partner share of 7.97 percent.
- United States exports to Japan worth US$ 63,234 million, with a partner share of 4.36 percent.
- United States exports to United Kingdom worth US$ 55,280 million, with a partner share of 3.81 percent.
However USA is China's top export market.
https://www.statista.com/statistics/2563...ort-value/
It is quite obvious who will benefit more from a trade war, or in this case who will suffer more, and who has more bargaining power.
Another thing trump has got right is the intellectual property protection. Even for simple things like movies, piracy in china causes a lot of loss in revenue.
And of course if Ebay/Amazon/Google/facebook were to be allowed to operate freely in China without restriction, as in a free trade situation, the billions made by tencent/alibaba/etc... would all have gone to the american companies and american economy. IMHO this tech barrier is a big unfair trade situation which China has been happily exploiting for years.
I heard China is already pressing the USD down by promising oil countries gold or renminbi but not USD.
Europe just keep quietly supporting China. Euro is up against the US$ YTD 2.95% and that is a lot. 3 years, 13.49%...huge!
No comments from Europe to support USA..none! Nothing from UK too, remembering UK is the father originally.
This round U.S. will be the loner and loser.
Look at the Dow down and down., much weaker. No confidence in U.S. companies future profitability already.
(25-03-2018, 09:26 AM)edragon Wrote: [ -> ]I heard China is already pressing the USD down by promising oil countries gold or renminbi but not USD.
Europe just keep quietly supporting China. Euro is up against the US$ YTD 2.95% and that is a lot. 3 years, 13.49%...huge!
No comments from Europe to support USA..none! Nothing from UK too, remembering UK is the father originally.
This round U.S. will be the loner and loser.
Look at the Dow down and down., much weaker. No confidence in U.S. companies future profitability already.
Low USD is what Trump wants, good for exports.
euro already announced steel tariff against China last year, they are not anyone's friend as Euro region is itself protectionist, hence their decline.
And of course no one will say anything to help either side, when the big boys fight its better to quietly watch.
Trump is after all a businessman, probably not the best in his line, but probably one of the best among country leaders.
His military, domestic affairs, foreign affairs, environmental issues may be sub-par but it is unlikely that the tariff deals were conceptualized as a bad deal for US without considering the china's response.
Looking at a mere 3 billion(5% of 60 billion??) retaliation, it is a weak response.
And looking through the list, it will be great if China impose tariffs on those items since these items are getting more expensive in Singapore over the year
. I welcome US to re-export them to Singapore.
