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President Donald Trump's tariffs on Chinese products will officially start, intensifying the growing trade war between the United States and China.
The US Trade Representative's office ordered Customs and Border Protection to begin charging duties on Chinese imports as of midnight Friday. The 25% tariff will apply to 818 Chinese products, ranging from airplanes to chicken incubators to industrial magnets. China exported $ 34 billion worth of new products eligible for US tariffs last year.
The Chinese government has promised to respond with tariffs on an equal measure as soon as Trump's tariffs come into force.
Movements are the culmination of months of threats and de-escalation attempts, and they probably represent the beginning of an economically painful trade war.
Rates were in effect for months
Prices on Chinese goods are derived from a survey conducted by the Trump administration on the theft of intellectual property of US companies. The USTR launched the investigation in August 2017 and determined that intellectual property theft was a major economic problem for the United States.
In March, Trump decided to go ahead with tariffs on Chinese exports of $ 50 billion to the United States to punish China for alleged theft and push the government to change his practices. China reacted by threatening tariffs on US exports of $ 50 billion to China.
This sparked furious negotiations, which eventually resulted in a tentative trade agreement between the Trump administration and Chinese officials.
But Trump then criticized the deal, and trade experts lambasted his vague terms. The White House then advanced with tariffs, which led the Chinese to withdraw from the agreement.
At the present time, the United States and China remain far removed from any agreement aimed at reducing trade tensions.
In addition to the first tier of tariffs that would come into effect on Friday and the second week, Trump continued to threaten action against China unless the country reduced its trade imbalance with China. WE.
Trump said that if China did not bring fundamental changes to its economy and did not reduce intellectual property theft, the United States would receive $ 200 billion of Chinese imports with a tariff 10%. And if China were to respond in kind to this set of tariffs, 200 billion additional dollars of Chinese imports would face the same fate.
If Trump followed these two threats, almost all of China's exports to the United States would be subject to tariffs.
Trump threatened further measures to limit China's ability to access the United States. For example, Trump announced that the United States would expand the use of the Committee on Foreign Investment in the United States, which could limit Chinese investment in US companies.
China, for its part, did not back down. The Chinese Ministry of Commerce has described Trump's pricing threats as "blackmail" and has promised that China will not shrink from a trade fight.
"The United States fires on the world, including itself," spokesman Gao Feng said Thursday at a press conference.
The commercial battle could be a brake on the economy
Economists are generally wary of tariffs, as they drive up costs for businesses and consumers. Increasing costs leads to fewer purchases and generally hinders economic growth.
While the first round of tariffs will only slightly slow the US economy, the pain will increase if Trump continues on the protectionist path, said Gregory Daco, the chief economist of the United States to Oxford Economics.
"Although each measure alone has weak macroeconomic effects, the combination of measures, disruption of the supply chain, and increased business uncertainty could create problems for the economy. American economy, "said Daco.
JPMorgan economists David Hensley, Bruce Kasman, Olya Borichevska, agreed that the direct economic consequences of tariffs would probably be mitigated in the beginning. But in a note to customers, they warned of downstream effects that would be much more substantial:
"While the direct effects of trade sanctions will take time to be felt, the indirect effects of the growing risk of misrepresentation are likely to increase. In addition, a modest threat to global supply chains and institutions that support international trade and production could have a profound and far-reaching impact on shock sentiment far beyond the parties directly concerned. "[19659023]
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