US announces plans for a further $200 billion in trade tariffs against China
Liam Sheasby, News Editor
11 Jul 2018, 4:47 p.m.
The US Government has published plans to implement further trade tariffs against China, following the recent $34 billion tariff spat. The trade war between the two is escalating rapidly, with the USA adamant that China is both breaching intellectual property rights and subsidising specific industries, such as steel, to make them preferable to American companies.
Chinese officials have called the threat “totally unacceptable” and are continuing to press the World Trade Organisation (WTO) to take action against what they believe to be unlawful behaviour from the United States.
President Trump warned China not to match the USA’s tariffs or face strong reprisal, but China ignored the warning and proceeded to match the $34 billion worth of restrictions last Friday. The document, available here, details the extent of America’s trade tariffs against China. The plan is proposed to come into action by September this year.
China has once again threatened to implement counter-measures, but the country only imports $130 billion worth of goods from the US. This might explain why the Chinese authorities are steadily managing a reduction in the value of the Yuan, in order to make it more competitive and tempting for investors and traders. As the tweet below says, neighbouring nations to both China and the US would benefit from China’s suffering in the dispute, but the lowering of the Yuan might compensate enough to avoid any mass exodus of low end manufacturing from China.
Big beneficiaries of 10% tariffs on US$200bn of US imports from China would likely be Vietnam and Mexico. Rest of SE Asia and India could also see increased exports to US as a result.— Duncan Innes-Ker (@duncanik) July 11, 2018
In response to the announcement, the Asian stock markets fell sharply; the Hang Seng index in Hong Kong is currently down by 1.29%, the Shanghai Composite is down by 1.76%, and the Nikkei in Japan is down by 1.19%. Commodities, such as industrial metals, are also suffering, as seen below:
absolute commodity bonfire in China post tariffs: Nickel -2.4%, Copper -3.5%, Zinc -6% (limit down!) pic.twitter.com/0v9LNiNnMA— taxloss (@taxlosstrades) July 11, 2018