China may have 'underestimated' Trump's resolve

China may have 'underestimated' Trump's resolve

Trump threatened to pursue additional tariffs on another $200 billion worth of goods if China increases its tariffs yet again.

Oxford Economics estimates that if President Donald Trump imposed the $200 billion in duties that he threatened to implement late Monday, and China responded in kind, usa growth could slow by 0.3 percentage point next year. At a combined $450bn worth of goods tariffed, the U.S. will have placed tariffs on all but 10% of the $505bn worth of goods imported from China in 2017.

President Donald Trump is calling for tariffs on $200 billion in Chinese imports, drawing a rebuke from China. But the tit-for-tat expansion of tariffs has US oil industry officials and politicians calling on the Trump administration to move cautiously.

The Trump administration has vowed to make China pay for intellectual property theft as well as other unfair trade practices it alleges the country is engaging in. Virtually all economists agree that restricting trade has damaging economic consequences for all countries that employ such policies, but the scale and the scope of the losses are potentially huge, not just for the US and China, but also for countries not directly involved.

The tariffs were quickly matched by China on US exports, a move that drew the president's ire.

Wall Street slumped in midday trade as trade tensions between China and the U.S. continued, as the two largest economies in the world faced a tit-for-tat over trade tariffs.

"Just ask yourself: Would China have allowed America to do to it what China has done to America?" he said later.

China's commerce ministry said Beijing will fight back with "qualitative" and "quantitative" measures if the United States publishes an additional list of tariffs on Chinese goods.

White House trade advisor Peter Navarro told reporters on Tuesday that it's China who has more to lose in any trade war, . highlighting that China's exports to the us exceeded the amount of goods exported from the U.S.to China.

Analysts say the direct impact of the tariffs may be limited, especially for the US economy, which is in strong shape.


Gary Cohn, Mr Trump's former top economic adviser, said last week that a "tariff battle" could result in price inflation and consumer debt - "historic ingredients for an economic slowdown".

In Beijing, China's Commerce Ministry responded swiftly to Trump's latest threat, warning that if the USA imposed fresh tariffs, China would have to adopt "comprehensive measures combining quantity and quality to make a strong countermeasure".

Smaller, more USA focused stocks were doing better than more internationally-focused US stocks, said Mokhtari. It has yet to say when that might take effect.

"It was a trade war that put the Great in the Great Depression".

Trump said Monday that China's response "indicates its determination to keep the United States at a permanent and unfair disadvantage". -China Business Council. Parker suggested that such steps might include delaying or denying licenses required by USA companies in China. Total imports of American goods into China were worth less than $170 billion in 2016, according to the USTR.

"The United States has initiated a trade war and violated market regulations, and is harming the interests of not just the people of China and the USA, but of the world", the ministry said.

Shares of Boeing, which has been a proxy for trade-war tensions with China, fell 3.8 percent, weighing the most on the Dow.

With the move China sends a clear signal that it will follow Trump one-to-one on whatever move he takes against China.

The most-traded September iron ore on the Dalian Commodity Exchange slipped 0.4 percent to 453 yuan per tonne, but off the day's low of 449 yuan. Many in the Republican Party, who are more instinctively in favour of free trade, don't think this is the right way to tackle problems with China.

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