China says US ‘disappoints’ the world with trade war

‘If we’re going to use tariffs, this gives us more flexibility and it’s a more meaningful threat,’ he said, adding that Trump’s pressure strategy will not work if he does not resolve trade disputes with United States allies such as the European Union, Mexico and Canada. That prompted concern among American companies that retaliation might expand to disrupting their operations in China.

Trump’s tariffs target goods the White House says benefit from industrial policies such as “Made in China 2025”, which calls for developing Chinese competitors in robotic, artificial intelligence and other fields. On Friday, the Ministry of Commerce described its planned response: four different types of tariffs on $60 billion of USA goods.

It typically has taken several weeks after the close of public comments for the tariffs to be activated.

This is on top of the new tariffs already imposed on $34bn worth of products from China, and an additional $16bn scheduled to go into effect soon.

“We hope that those directly involved in the United States’ trade policies can calm down, carefully listen to the voices of USA consumers…and hear the collective call of the global community”, Foreign Minister Wang Yi said, Reuters reports.

In a tweet last month, US President Donald Trump suggested that China could be undermining a North Korean denuclearization d0e000al because of the ongoing trade war.

“China has to take necessary countermeasures to defend its dignity and the interests of its people.”

While American and Chinese officials have hinted at the possibility of restarting talks in recent weeks, it’s been nearly two months since they last held high-level negotiations.

The tariffs discussed in this week’s pronouncements are still in the threat stage; they have not yet taken effect.

While the conflict nominally centres around the US’ US$375 billion annual goods trade deficit with China, it has morphed into a chapter in the nations’ broader strategic rivalry. Beijing responded to news reports on Tuesday about the planned tariff increase by cautioning the US against “blackmailing and pressuring” and it vowed to strike back at every escalation. Those tariffs have already started to affect some businesses, though only a small fraction of the US economy is experiencing consequences.

Trump has threatened to slap tariffs on virtually all of China’s exports to the United States.

“I think the uncertainty caused by the trade war with China is probably pushing businesses to bring in goods earlier to avoid potential duty rate increases while it all plays out”, Eric Flicker, director of operations and supply chain at CL Apparel Marketing, wrote in a LinkedIn post.

China’s commerce ministry said the US tactics would have no effect on China, and would disappoint countries that are against trade wars. Investment is down. Consumption is down.

Rapid US GDP growth in the second quarter was mostly the result of tax cuts, which stimulated consumer spending, as well as a race to export soybeans and beat the tariffs.

There was no immediate reaction from the Chinese government. We and the United States rate market expect the Fed to slow the pace of rate hikes in 2019 as the USA economy is likely to slow as the boost from late cycle fiscal stimulus fades. But if the Trump administration is listening to American companies that do business in China, it will hear a different story than if it listens to US consumers or the “collective call of the worldwide community”.