In February, U.S. Trade Representative Robert Lighthizer delivered President Trump’s Trade Policy Agenda and Annual Report to Congress, outlining how the Administration was promoting free, fair and reciprocal trade and strongly enforcing U.S. trade laws. Beijing says it is ready to retaliate against $60 billion of American imports. On July 6, the USA began taxing the 818 goods, worth $34 billion, remaining from the April list.
The US announced earlier this week that its own tariffs on $16bn of Chinese goods would start that day.
China on Wednesday said it would impose tariffs on an additional US$16 billion ($23.9b) in U.S. autos and energy products, retaliating for the Trump administration’s latest import levies on an equivalent value of Chinese goods.
The Chinese counter-move will take effect immediately after the United States imposes tariffs on the same amount of Chinese goods on 23 August.
Three more LNG export terminals in the US will come into operation by 2019 in Louisiana and Texas and another seven similar projects are being proposed in the US Gulf area. The US imports considerable quantities of Chinese active pharmaceutical ingredients (bulk drugs) for the production of finished dosage (formulations).
The central bank set a reserve requirement ratio of 20 percent from Monday for financial institutions settling foreign exchange forward dollar sales to clients, effectively raising the cost for investors shorting the yuan. A weakening currency makes a nation’s goods more affordable for overseas buyers.
It’s a new round of tit-for-tat tariffs in the U.S. “Import growth is likely to slow as domestic headwinds continue to weigh on economic activity”.
The prospect of such policies weighed on bonds Wednesday, with 10-year Chinese treasury futures for September delivery CFTU8 falling 0.4 percent to 95.620. During April this year, China exempted import tariffs on 28 essential drugs including drugs for cancer treatment.
The latest trade data published by China’s General Administration of Customs showed the Chinese crude oil imports rose slightly in July after falling for the previous two months, Reuters reports.
Beijing has stepped up efforts, so far without success, to recruit governments including Germany and France as allies.
The US and China are dependent on each other for the supply of pharmaceutical products.
Of the 23 states that count China as their largest source of imports, Trump won 15 in the 2016 presidential election. So far, despite the rhetoric, only $37bn worth of imports into China and the United States have actually been affected. Likewise, the U.S. was the leading import source of drug formulations for China during 2016, with a share of 14.9%.
Given copper’s importance in manufacturing and construction, any sign of weakness in Chinese demand would raise concerns about the impact of the trade dispute. Longer term contract negotiations could also be affected. Although the two sides remain far apart, Beijing has made subtle shifts to a more conciliatory position. Big-ticket USA items that are still not on any list are crude oil and large aircraft.
However, the compromises China is considering on Made in China 2025 seem small, so far.
Workers transfer Lithium-ion batteries in a factory in Taizhou in east China’s Jiangsu province.
The tariffs would be implemented depending on US action which is expected in September. Australia, Indonesia and Malaysia are also nearby suppliers for LNG, which is expected to be part of China’s next round of fire. This list included various pharmaceutical products but the possibility of a potential trade war in pharmaceutical appears unlikely for now. This article is strictly for informational purposes only.