Publicado: Vie, May 17, 2019
Financiera | Por Marilu Caballero

China announces retaliatatory tariffs as Trump defends U.S. moves

China announces retaliatatory tariffs as Trump defends U.S. moves

On Monday, China hiked tariffs on more than 4,000 imports from the USA, including cotton, machinery, grains and aircraft parts. Earlier, stocks fell in Europe and Asia. -China tariff battles have proved Pyrrhic for both sides, one thing is clear, despite what Trump wants to believe: American consumers and businesses are paying a big price for them. "As is often the case, however, the losers will not be the negotiators or presidents, but the people".

In a previous round of tit-for-tat moves, the U.S. imposed 10 percent tariffs on $200 billion of Chinese imports in September. In doing so, American officials accused China of backtracking on commitments it made in earlier negotiations. -China trade negotiations reflects a breakdown in trust and widening differences that are unlikely to be resolved soon. And China's retaliatory tariffs are inflicting pain on American farmers, a key part of Trump's political base.

ANZ Research believes the odds of reaching a "real deal" are "less than half". That means the burden of the tariffs would fall on those who are now unemployed, or on other companies that have lost business because their customers no longer have the money to buy their products.

Until the blowup of the past week, the two countries appeared to be making progress.

According to the Congressional Budget Office, Trump's China tariffs-even before the latest hike in May-equate to a 0.1 percent drop in the annual rate of U.S. GDP growth rate on average until 2029. "China hopes the US will get back to the right track of bilateral trade and economic consultations and meet with China halfway".

People close to the talks said finding an agreement is likely to prove increasingly hard with hardliners on both sides seeing the latest breakdown as evidence the other side can not be trusted. But nothing has been scheduled.

No date has been set for fresh talks. but it's likely Trump would meet with Chinese President Xi Jinping during the G20 meeting in Osaka, Japan, in late June, Kudlow said.

The president has repeatedly insisted that increased tariffs on Chinese goods don't hurt American consumers.

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Kudlow was considerably more measured on Fox News Sunday.

To do so would be an unacceptable concession for the country that is still sensitive to what it considers years of subjugation from foreign powers until at least the mid part of the last century - a topic that is not only still taught to every Chinese student but which has become part of the Chinese national psyche. "Losing a valuable market, losing stable pricing, losing an opportunity to support our families and our communities". The administration past year handed farmers aid worth $11 billion to offset losses from trade conflicts. "Very bad for China, very good for US!"

The president's allies in Congress scrambled to limit the damage to farm country. "You can't move these goalposts like they're moving them and expect to be respected".

USTR said it would hold a public hearing on the tariff list on June 17, with final comments due as little as seven days later.

The retaliation comes as U.S. President Donald Trump signals his intent to slap tariffs on all Chinese imports if Beijing does not give in, suggesting a prolonged standoff between the world's two largest economies that could roil global markets for weeks or months to come.

Investors' trade war fears have clearly intensified - Bank of America Merrill Lynch's monthly survey showed equity allocations falling sharply in May and a record number of funds saying they were hedged against a sharp stock market fall. "Our results imply that the tariff revenue the now collecting is insufficient to compensate the losses being born by the consumers of imports", the study found.

The latest tariff increases could intensify the economic pain.

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