Commercial War: Trump "will reap what he sows" – China fails in tariff dispute

M Sometimes a few hours can decide a good or maybe no business. This was also clear for the captain of the cargo ship Peak Pegasus. Early Friday night, he was still trying to bring his run back under the flag of the Liberian freighter into the port of Dalian, north of China. His goal: The Pegasus Peak should have entered, before the Beijing government reacted in turn with the tariffs on punitive tariffs of America.

If the data found on the website www.marinetraffic.com are correct, then the ship turned 17: At 7 am local time at anchor. And until now too late. Because at 12:01, China had charged its retaliation fees on US goods worth $ 34 billion. In the "Tit for act" – in which the same is compensated by the same – the Chinese government inaugurated the next turn. It is now becoming more expensive in China for a whole range of US export products. In terms of the dispute, things are taking shape: Chinese leaders are talking about "the biggest trade war in economic history," which triggered US President Donald Trump. Ironically, China, in its daily activities not yet known for open markets and anti-protectionism, now wants to defend the multilateral world trading order in the sense of the world. WTO. The government is building a bastion against Trump.

We defend ourselves. Lever China: Beijing is trying to meet US President Trump where it hurts. With his constituents. We see it in the selection of these products, which are now more expensive by the countermeasures of Beijing. While the US is increasing the costs of its imports from technology sectors such as computer products and machinery, China is also refunding tariffs on agricultural products.

American farmers, the strong riding of Trump, become victims of the trade war. And that does not happen by chance to soy growers. Farmers made sales of $ 22 billion last year, of which $ 14 billion came from China

Tit for Tat

Tech tariffs against penalties for agricultural products. It's a weird situation. The global power of the United States, the world's strongest economy, faces the burden of agricultural products. Their big opponent is damaged by fines on technology products. And an agreement in the trade dispute is not in sight.

On Thursday, Beijing offered negotiations and promised to "not fire the first shot" in the trade war that was imposed on it. Friday night changes everything. Trump applies punitive tariffs. The opposite side reacts – Tit to act. In other cultures, it is said: an eye for an eye, a tooth for a tooth.

Now, there is no choice but to respond, according to a statement by the Chinese Ministry of Commerce. The United States had acted against all the rules of the World Trade Organization. They unilaterally levied taxes on imports. Of "typical commercial hooliganism", is the speech.

Such measures "seriously undermined" overall security of supply and value creation. They hindered the global economic recovery, created chaos in the markets, hurt multinationals as well as American businesses and individuals. The list of allegations is long

China wants to call the WTO

Beijing also wants to call the WTO in the tariff dispute. At the same time, foreign investors in China are also assured that despite the new development, Beijing wants to continue its economic reforms and protect the rights of all companies based in China. China is currently trying to find support among Europeans for taking action against the United States.

It is only recently that the Americans have imposed punitive tariffs on steel and aluminum imports for the EU member states. For its part, the EU responded with tariffs on motorcycles, jeans and Harley-Davidson motorcycles. Now, the Trump government is planning to punish European car exports. Trump against the rest of the world. The trade war has just begun. Only how and when it ends, is currently not in sight.

China had tried to prevent escalation through communication before the entry into force of US tariffs. 59% of US imports from China, 25% more expensive by President Donald Trump, would be produced in the People's Republic by joint ventures and foreign companies, according to a statement from the Chinese Ministry of Commerce.

Not a lot of these products come from American companies, said the spokesman of the Ministry of Commerce, Gao Feng. Of the 800 US $ 34 billion worth of imported goods, to which the United States will impose punitive duties in the future, worth $ 20 billion worth of joint venture products.

Trump opens several fronts

Danger of forging a front of dissimilar opponents. Because the punitive US tariffs affect so many foreign companies, the US President risks that other states "automatically side with China's side against unilateralism and protectionism," said the economist Liang Ming, director of the Global Times. "We hope for that."

America, once a pioneer of world trade based on free rules, is now fighting against the system of multilateral trade agreements. China, in concrete everyday life, far from being a big advocate of free trade and the business world, suddenly stands on the other side.

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But Trump does not let that deter him from his intentions. Friday morning, he is not content to make his decision to implement punitive tariffs. He connects them to the announcement that they would not back down if the Chinese resisted. The $ 34 billion is only a beginning, it threatens. In 14 days, he will raise punitive tariffs on China's imports worth 14 billion dollars.

One can not really guess what consequences this might have not only for world trade, but for all economic development on the globe. If the US president executes his threat, a total of $ 1102 50 billion goods will be allocated

Trump increases its threat

and Donald Trump becomes bigger: if China does not give in, it will have more Order punitive tariffs , first on a value of 200 billion dollars then 300 billion dollars. This development is not only worrying in China. Even within the federal government, which is awaiting a Beijing delegation to the German-Chinese intergovernmental consultations next week, it is very worried – even if, so far, the consequences of the general trade conflict leave little trace .

Europe's leading shipping companies, such as Hapag-Lloyd and Kuehne + Nagel, are currently waiting at relatively minor rates. However, the situation is worrying.

However, Beijing's leaders do not want to be satisfied. There is now rage here. Trump "will reap what he sows," the Xinhua News Agency warned of collateral damage.

These policies are particularly costly for US consumers because of rising prices. With his policy, the US president defeats all his gains through tax reforms and deregulation. Propaganda is currently underway on both sides in this dispute.

No compromise in sight

Trump had already tried to pressurize China with possible punitive tariffs of a total value of 450 billion dollars. Now he has increased his $ 100 billion commitment. At first, the US president had the intention of reducing the US trade deficit by some 375 billion dollars.

It is expected to decrease by $ 200 billion by 2020. However, Trump rejects the results of three talks held in Washington and Beijing in May and June.

This is probably not enough for him. China's commitment to buy more than $ 10 billion worth of agricultural and energy products in the United States was apparently insufficient.

Gradually, he extended his punitive measures to the Chinese technology industry, accusing him of theft of intellectual and unfair property at the expense of the United States. A compromise is currently not in sight.