Economy

Newest Tariffs On China May Spread Pain To Ordinary Households

Newest Tariffs On China May Spread Pain To Ordinary Households”

Trump's top economic advisor, Larry Kudlow, said in NY on Monday: "We stand ready to negotiate with China any time if they are willing to move towards serious talks to remedy trade problems". "But at this time, everything the United States does not give the impression of sincerity or goodwill", he added.

Equity futures were showing gains the morning after the Trump administration applied additional tariffs on $200 billion of Chinese goods.

China said Tuesday it would "take countermeasures" after US President Donald Trump announced new tariffs on $200 billion of Chinese imports taking effect next week.

A Wall Street Journal report Sunday says China is considering restricting sales of materials, equipment, and parts from Chinese suppliers to USA manufacturers' supply chains.

In the meantime, the value of the Chinese yuan has dropped relative to the dollar, making it easier for Beijing to withstand USA tariffs.

He also warned that if China retaliated then the USA would "immediately pursue phase three" which would mean imposing further tariffs with taxes on another $267bn worth of Chinese products.

Trump also wants to replace the North American Free Trade Agreement, which includes the United States, Mexico and Canada, with a new agreement that would shift more auto production to the US The administration has already reached a deal with Mexico that excluded Canada.

Beijing is considering Washington's invitation last week to revive talks on their fight over Chinese technology policy and plans for state-led development of global champions in robotics and other fields.

In currency markets, the dollar succumbed to some selling pressure, with the greenback index .DXY down 0.2 percent at 94.778, having bounced from a low of 94.359 at the end of last week as Treasury yields rose.

The trade tiff has yet to be felt in US markets as the tariffs, which now are set at 3.8 percent, may rise to just 10 percent, which most companies can handle in a growing economy, said Brian Nick, chief investment strategist at Nuveen.

In Beijing, China's commerce ministry was unusually silent in the hours after the U.S. tariff announcement, as China's vice premier Liu He reportedly held a meeting to decide on Beijing's response. The Office of the US Trade Representative concluded after an investigation that China's tactics range from requiring US and other foreign companies to hand over technology in return for access to the vast Chinese market to outright cyber-theft.

Fang told the Tianjin forum that he hopes the two sides can sit down and talk, but added that the latest US move has "poisoned" the atmosphere.

China vowed to retaliate against the new round of tariffs announced Monday by Trump.

At the same time, the administration said it remains open to negotiations with China.

Oil prices edged lower on concerns over how the U.S. -Sino trade dispute may dent global crude demand, but losses were limited as the market weighed potential supply tightening due to Iran sanctions.

China's yuan currency slipped against the dollar on Tuesday after news of the US measures. The sensitive Australian dollar also moved up 0.4 percent to $0.7212 having also initially been hit when the tariff details broke.

Chinese chemical inputs for manufacturing and textiles and agriculture eliminated from tariff list.

But the adjustments did little to appease technology and retail groups who argued that the tariffs would hit consumers hard.

The tough talk and fear of more tariffs and retaliation rattled investors and sent indexes dropping.

"Most of our member companies are "in China, for China" - selling goods to Chinese companies and consumers, not to Americans - and thus ultimately boosting the US economy", Jarrett said.



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