Saturday, 22 September 2018

Trump threatens China with more tariffs


We have far more bullets’: Trump threatens China with more tariffs if Beijing dares to retaliate

‘We have far more bullets’: Trump threatens China with more tariffs if Beijing dares to retaliate

RT,
22 September, 2018


Donald Trump has threatened to impose even more tariffs on Chinese goods if Beijing dares to impose tit-for-tat measures in response to Washington’s latest package of levies targeting some $200 billion of Chinese exports.

Trump has cautioned the world’s second-largest economy to think twice before engaging in a trade war in which, he claims, the US has “more bullets.”


We’re going to go $200 billion at 25 percent on Chinese made goods. And we will come back with more if they retaliate. We have a lot more to come back with,” Trump told a packed rally in Missouri for Republican Senate candidate Josh Hawley.

© Thomas Peter 
 

We are cracking down on the unfair trade practices of China… We have rebuilt China. We have given them such wealth. And we are changing it,” Trump told the cheering crowd. “So we charged 25 percent on $50 billion worth of merchandise tariffs coming in. And then they said, 'We're going to do the same thing'. And I've said: 'That is okay. We have far more bullets'.”
 
China said it will institute new tariffs on US goods worth $60 billion from September 24, after the US administration slapped new levieson Beijing’s exports.

While both the Chinese and US measures are set to go into effect Monday, Trump previously noted that the initial 10 percent tariffs would rise to 25 percent on January 1, 2019. The world’s two largest economic superpowers have already applied tariffs on $50 billion of each other's imports.

While the US keeps accusing China of refusing to buy American products to maintain a “fair” trade balance, Beijing is complaining that Washington’s protectionist practices are detrimental to the entire global economy – and has even taken up the issue with the World Trade Organization.


Yet, despite Beijing’s willingness to negotiate some kind of a deal to stop the escalation of the trade war, the White House is trying to coerce their partner into submission. In a separate slap on the wrist, just days after announcing the new $200bn levies, the Trump administration introduced sanctions against China’s leading arms acquisition body and its director, over the purchase of Russian Su-35 multi-role fighters and S-400 missile defense systems. Beijing immediately hit back at the US administration, urging it “to remedy the mistake and cancel the sanctions” which forbid arms export licenses and foreign exchange transactions under US jurisdiction. “Otherwise, the US has to bear the consequences,” the ministry's spokesperson stressed.

Amid the escalating tensions, China has reportedly canceled a mid-level delegation visit to Washington next week, that was supposed to pave the way for further trade negotiations with President Xi's top economic adviser and vice-premier Liu He, the Wall Street Journal reported, citing sources.

A Path To War? China Cancels US Trade Talks As 'Skirmish' Escalate

21 September, 2018
 
Following a surge in Chinese, European, and much of the US equity markets this week amid hopes that the so-called 'trade skirmish' was less 'war-like' than expected, China just dropped an early Saturday morning (local time) tape bomb that is sure to resurrect 'trade war' talk.

After President Trump slapped a fresh round of tariffs on Chinese goods, targeting 10 percent duties on $200 billion of goods; the two camps were scheduled to meet in order to dial back tensions. As we noted earlier in the week, China had 'downgraded' the team with a mid-level delegation from China due to travel to the U.S. capital to pave the way for Vice Premier Liu’s visit.

That was what sparked hope that this was just a trade skirmish (as Jamie Dimon attempted to play down), sending stocks soaring all week.

However, that is all over now.

The Journal  just reported on Friday that, according to sources, China has rescinded the proposals to send two delegations to Washington.
Chinese officials have said such pressure tactics wouldn’t induce them to cooperate.
By declining to participate in the talks, the people said, Beijing is following up on its pledge to avoid negotiating under threat.
Everything the U.S. does hasn’t given any impression of sincerity and goodwill,” Chinese Foreign Ministry spokesman Geng Shuang said at a press briefing Friday.
We hope that the U.S. side will take measures to correct its mistakes.”

*  *  *
The timing of this news, after the exuberant equity week, is also noteworthy as it follows Ray Dalio's, founder of Bridgewater, warnings that the current trade tensions mirror those of the 1930s:

"I think that the 1935-40 period is most analogous to the current period and that it is worth reflecting on what happened then when thinking about US-Chinese relations now. 

To be clear, I’m not saying that we are on a path to a shooting war, but I am saying that we have to watch what path we are on, given these cause-effect relationships that history has taught us and that are described in the template. This excerpt describes how the economic and political conditions of the late 1930s evolved into the wars that followed. "


We have discussed this case-effect relation before...
Get ready for some Sunday night futures fun and games...

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