US issues $300B target list of Chinese goods in trade battle

US issues $300B target list of Chinese goods in trade battle

US issues $300B target list of Chinese goods in trade battle

Trump hopes his tariffs will spur domestic purchasing as USA businesses buy from other US companies instead of importing what they need.

A March 2019 paper by the National Bureau of Economic Research, which looked into the data around the impact of Trump's tariffs, concluded that the costs were nearly entirely borne by American consumers and importers. Before last week, it appeared as if the United States and China may have been headed to a trade breakthrough.

Chinese Vice Premier Liu He talks with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin as they depart a round of trade talks in Washington on Friday.

Earlier on Monday, Trump had said China should not retaliate because "things could only get worse", however, just hours later China unveiled its new round of tariffs in a tit-for-tat move against the U.S. which had imposed $200 billion worth of Chinese goods in the midst of the trade war last week. The targeted goods include consumer products like luggage, backpacks, bamboo furniture, etc.

A total of 5,140 US products will be subject to additional tariffs of 5%, 10%, 20% and 25% starting June 1, the finance ministry in Beijing said in a statement.

On the supply side of the oil markets equation, Saudi Arabia, Russia and other major producers, with memories still fresh from the cataclysmic drop in oil prices from more than $100 per barrel in mid-2014 to dropping below the $30 price point in January 2016, can be expected to withhold as much production as possible to keep prices from plunging too low.

On Monday, the Dow closed 617 points down (2.4% drop).

That's not how this works.

Japan's exports to Asia have already slowed and Tokyo is concerned about further pressure from Trump to secure a political victory in the lead-up to the 2020 presidential poll. Trump has demonstrated again and again that he is incapable of understanding the consequences of tariffs. This should have been done by our leaders many years ago. Businesses who need those products to manufacture their goods will have to charge more for their products to offset the losses.

Trump had ordered the new tariffs, saying China "broke the deal" by reneging on earlier commitments made during months of negotiations.

The Trump administration has maintained tariffs are an important tool to correct unfair trading practices with China. And now, Trump is promising new relief ahead China's incoming tariffs. In fact, US farm exports to China approached $26 billion in both 2012 and 2013 and came in at $19.5 billion in 2017 before his trade war began taking a toll on agricultural sales to China.

There are other industries affected of course.

After trade talks with China decayed into an all-out tariff war that left Wall Street reeling and threatened across-the-board price increases for American consumers, President Trump sought Tuesday to reassure the public that a deal would come "when the time is right". Instead, he has continually insisted that these tariffs effectively function like a direct tax on Chinese companies. "Ultimately it's paid for largely by China". The country's trade volumes with the Belt and Road countries rose by 9.1 percent in the first four months of 2019, while the figure with the United States is seeing a downward trend.

Moreover, businesses importing from China tend to do so as a means of reducing their costs, because Chinese goods are cheaper.

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