China on Tuesday said it will retaliate with higher tariffs on $60 billion worth of usa goods after President Donald Trump announced new us tariffs on $200 billion worth of Chinese imports.
If Trump ultimately enforces another round of tariffs against China, practically every Chinese good imported to the United States would be hit by higher tariffs. Indeed it will - but remember where that revenue will come from.
The Chinese cities and provinces have been hit by the Trump tariffs plan.
Trump doubled down on that threat Tuesday, vowing punitive measures against China if it targets politically potent US agricultural products for retaliation.
A bad policy just got a lot worse.
In the 14-page survey report, regulatory issues presented a significant challenge for foreign companies in China, highlighted by the Trump administration's Section 301 report. US officials are set to impose a new round of levies on an additional $200 billion of Chinese imports ranging from detergent to luggage. China has said that it will respond with another $60 billion in duties on USA imports.
The action is primarily targeted at changing China's practices relating to technology transfer, intellectual property (IP) and innovation.
The White House statement announcing the new tariffs blasts China for retaliating against earlier measures and warns that any further defiance will lead to the US levying tariffs on virtually all Chinese imports. If lost exports to the United States trigger a financial collapse in China - an unlikely but imaginable outcome - Beijing would slam the doors closed on worldwide capital flows, bail out the Chinese banks, and flood the domestic economy with cheap credit.
"Attempts to help those hurt by globalization via higher taxes or other forms of protectionism, even if well meaning, will raise prices and hurt all consumers, especially poor and middle-class families", economist Satyam Panday of S&P Global Ratings, told The Post.
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Over half of USA companies in China surveyed in a recent poll say they're already being harassed by increased inspections, slower customs clearance and other regulatory hurdles.
One more cut is on card.
Trump's basic goal is as ill-informed as his method.
"By further cutting import taxes, China is sending a message that it will keep opening up and reform no matter how the trade war goes".
The author is a researcher at the China Center for International Economic Exchanges. That escalation could spur USA companies to pre-emptively load up on those goods, too, Deutsche Bank said in a report this week.
These aims are achievable.
Trade organizations such as the Footwear Distributors and Retailers of America and the American Apparel and Footwear Association have lambasted the trade war since threats started looming at the start of the year - warning that the United States' reputation could be harmed globally, while rising import/export costs would be passed on to consumers. It will continue to invest and seek to become self-sufficient in key advanced technologies.
"Nobody is going to actually notice [price hikes] at the end of the day", Ross said, because increases shall be "spread across thousands and thousands of products". With luck, that will be the moment for Trump to declare victory and retreat.
In brief: With the US/China trade war now in full swing, we're starting to see more repercussions. Between now and then, Trump should try to make it easier, not harder, for Xi to strike a deal.