Zhiwei Zhang on How China Could Respond to US Tariffs

MONEY & MARKETS: China's President Xi moved to ease concerns about global trade — and financial markets love it
UPDATE: Trump says he'll 'make it up' to farmers impacted by trade dispute
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14 April, 2018

"They understand that they're doing this for the country".

One option could be to use the department's authority under the Commodity Credit Corporation, a federal entity that funds farm subsidies, to buy surplus US crops, Steve Censky, deputy secretary of the USDA, said Monday.

Stocks in Moscow calculated in USA dollars fell as much as 4.8 percent after dropping more than 11 percent on Monday, but shaved most of Tuesday's loss to end down 0.4 percent. U.S. officials have long accused China of forcing U.S. companies to hand over technology, or stealing it outright, and of spurring massive industrial overcapacity, among other complaints.

China Construction America acknowledged pausing some new United States investment amid trade war fears.

Currently, U.S. trade regulations state that a country which does not have a trade agreement with the United States will pay a 2.5 percent import duty tax for passenger vehicles imported into the country, and a 25 percent tariff for light-duty and commercial trucks, as well as vans.

U.S. -China trade talks said to stall over high-tech industry.

In a move to further force China to lower the billions of goods trade surplus running with the U.S., Trump unveiled tariff representing about $50 billion of technology, transport and medical products early this month, drawing an immediate threat of retaliatory action from Beijing.

The additional tariffs are being considered "in light of China's unfair retaliation" against earlier US trade actions, which included a proposed $50 billion worth of tariffs on Chinese goods, Reuters quoted Trump as saying in a White House statement.

His comments addressed major U.S. complaints in a simmering trade row that has seen both sides threaten retaliatory measures.

"If the U.S imposes high tariffs on China's broader cross-border supply chain, Vietnam, which exports goods that serve as inputs for China's exports, will be badly hit", said economist Le Dang Doanh.

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"However, recent weeks have shown us that volatility is likely to remain a key part of the trading landscape, with daily shifts in tone from the United States and China driving huge swings in stocks of late". In retaliation, China said it planned to put $50 billion in tariffs on USA planes, cars and soybeans.

Both Trump and Xi come from privileged backgrounds, although their routes to political power were decidedly different.

The first China International Import Expo to be held in Shanghai this November is not just another expo in an ordinary sense, but a major policy initiative and commitment taken of our own accord to open up the Chinese market, Xi said.

"I haven't seen any risky interaction", Koehler said, adding that problems could be avoided "if all the navies are operating in accordance with the global norm and law". Losing Republican majorities in either the House or the Senate could be fatal for the president, whose chances in 2020 could be torpedoed by facts uncovered by a Democratically-led Congressional investigation into his business practices and ties with foreign governments.

Yet, as North Korea's most important trade partner and political ally, China wields considerable influence and its willingness to enforce United Nations sanctions has built up its credibility as a reliable worldwide partner. Kudlow, who started his job a week ago after his predecessor, Gary Cohn, quit over the tariff plan, brushed aside the possibility of economic repercussions.

Treasury Secretary Steve Mnuchin said on CBS' "Face the Nation" that he didn't expect the tariffs to have a "meaningful impact on the economy" even as he left the door open for disruption. The trade war will likely not escalate to a full-blown one. The country engages in a maddening array of tactics that harm USA exporters and investors, violating the World Trade Organization rules it pledged to observe.

As of late October 2017, the US had poured $9.4 billion into Vietnam, ranking it 9th of the 100 countries and territories with investments in the Southeast Asian nation.

Further escalation could be in the offing.

China was unhappy that the Trump administration's National Security Strategy identified China as a country trying to subvert US interests.


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