Posts tagged with "Trade war"

Xi ‘one-ups’ Trump, announcing $75B in tariffs on U.S. goods as president heads to G7 Summit

August 26, 2019

Gotcha!  Just as President Donald Trump was preparing to meet with the leaders of Canada, France, Germany, Italy, Japan, and the United Kingdom at the G7 Summit in Biarritz, France, to discuss the global economy and his trade wars, China on Friday announced it would impose tariffs on $75 billion worth of U.S. imports, ABC News reported.

The move came in retaliation for duty hikes that the United States already has pledged to slap on Chinese imports starting next month.

What’s more, the announcement also came just before Jerome Powell, the chairman of the Federal Reserve gave a speech investors and analysts planned to scrutinize for signs of how the central bank would address worries of a slowing economy—as well as the president’s often mixed signals on payroll tax cuts.

According to ABC News, Powell implied in his speech that Trump’s trade altercations were among the factors precipitating a possible global economic slowdown— and he said they have made it more difficult for the Fed to set policies on interest rates.

Powell did not offer any clear signal on further cuts to interest rates, though, during his widely watched remarks in Jackson Hole, Wyo., according to the Associated Press.

Just after Powell spoke, Trump again blasted the Fed—saying in a tweet that it “As usual, the Fed did NOTHING.”

“My only question,” Trump tweeted moments later, “is, who is our bigger enemy, Jay Powell or Chairman Xi [of China]?”

China said that it would impose its new penalties on two batches of goods, on September 1 and December 15, according to the official Chinese news agency Xinhua. It said 5,078 American products would see duty hikes of 5% or 10% first; and that the later tariffs would hit “American-made vehicles and auto parts” with tariffs of 5% or 25%.

Those dates match with 10% tariff the Trump administration said would go into effect on $300 billion worth of imports from China.

Trump on Friday morning argued in a tweet that the economy was “strong and good, whereas the rest of the world is not doing so well.”

According to ABC News, the president has made the economy a central message of his campaign, and has accused the news media and Democrats of wanting a recession in order to tank his reelection chances.

Research contact: @ABC

As China continues to ‘go low’ on shipping rates, Trump moves the bar higher

October 22, 2018

President Donald Trump is threatening to intensify the trade war between the United States and China by ordering the U.S. Postal Service to withdraw from a treaty that has set shipping rates among 192 member nations for 144 years.

The Universal Postal Union—established in 1874 and adopted as a body of the United Nations in 1948—has enabled developing countries to pay lower rates when shipping packages internationally; often putting some of the cost of delivering packages on the postal services of wealthier countries.

Indeed, according to an October 17 report by Politico, the policy initially was intended to spur economic growth in poorer countries by connecting them with global markets.

But now that some of those countries—including China—have become exporting giants, the Trump administration hopes to use its withdrawal as leverage to negotiate more favorable terms for historically wealthy countries, like the United States.

Reaction has been mixed. A senior administration official told Politico that  the administration would prefer to stay within the union and that a full withdrawal takes a year to implement. Therefore, he said, he hopes that America can negotiate more favorable terms within that time frame.

“You could have something shipped from Indiana to New York and it would be more expensive than having it shipped from China because of price distortion introduced through the [old] rates,” Professor Rick Geddes, a postal service expert and Director of the Cornell Program in Infrastructure Policy at Cornell University, told NBC News for an October 19 story.

Companies such as Amazon and FedEx have long taken issue with the treaty, the network said—both citing what they believe are unfairly discounted shipping rates for foreign shippers.

However, on the plus side, American manufacturers, believe that withdrawing from the agreement would level what they see as an unfair playing field.

Indeed, Jayme Smaldone, CEO of the New Jersey–based company, Mighty Mug, wrote an opinion piece for the Wall Street Journal last February, noting that his firm paid $6.30 to ship by regular mail; but a Chinese company that sold a knock-off version could ship it to the same location from 8,000 miles away for just $1.40.

Jay Timmons, CEO of the National Association of Manufacturers, told

NBC News that the administration was making a positive move. “Manufacturers and manufacturing workers in the United States will greatly benefit from a modernized and far more fair arrangement with China,” he said.

American consumers had for years benefited from lower e-commerce prices on sites like Amazon and eBay when buying lower-priced Chinese goods. Without the discount, those sellers could evaporate and U.S. online shoppers would have to pay higher prices.

“Chinese sellers on eBay and other platforms may disappear, or at the very least they will not find it so easy to sell to Americans anymore,” Gary Huang, chairman of the Supply Chain Committee of the American Chamber of Commerce in Shanghaitold Bloomberg.

He added, “American consumers will have less access to that really cheap stuff.”.

Research contact: @matthewchoi2018

Saying Trump is creating an ‘economic emergency,’ China retaliates against new U.S. tariffs

September 19, 2018

Following an announcement by U.S. President Donald Trump late on September 17 that he intended to impose a 10% tax on a $200 billion list of Chinese imports, ranging from consumer goods to manufacturing materials, the People’s Republic now has retaliated in the ongoing trade war.

The Chinese Finance Ministry announced on September 18 it would go ahead with plans announced in August to tax 5,207 types of American-made goods—a $60 billion list, ranging from coffee to farm machinery. The smaller, mismatched dollar amount reflects the fact that China is running out of American goods to tax, due to its trade imbalance, NBC News reported..

The new round of tariffs is aimed at curbing “trade friction” and the “unilateralism and protectionism of the United States,” the ministry said on its website.

The new tariffs, levied at a rate of 5% and 10%, will come into effect on September 24. NBC said — the date Trump targeted for his latest round of punitive tariffs. Trump also has stated that the new tariffs will rise to 25% by January 1.

According to the network news source, Trump has repeatedly said his goal is to force partners to the table to renegotiate current trade deals that he and his supporters view as unfair to American economic and security interests. Foreign businesses have long complained that China’s protectionist policies are pushing them out of promising economic opportunities.

The Chinese Commerce Ministry said that it had been forced to react because the U.S. was creating an “economic emergency.”

Economists have warned that the escalating battle could knock up to 0.5 percentage points off global economic growth through 2020.

Research contact: @lbayly_nbcT

Trump’s tariffs on steel, aluminum raise ‘external risks’ for U.S. companies

March 27, 2018

U.S. trade policy has risen to the top of the list of “biggest external risks” facing the members of the CNBC Global CFO Council., an elite group of chief financial officers representing public and private companies from various major sectors.

Indeed, based on a quarterly poll of the council members released on March 23, more than one-quarter (27.3%) say U.S. trade policy is now the biggest risk their companies face. That’s up from 11.6% in the fourth quarter of 2017, outranking other threats that have recently ranked high among business concerns, including “threat of cyber attack” and “consumer demand.”

The CNBC Global CFO Council represents some of the largest public and private companies in the world, collectively managing more than $4.5 trillion in market capitalization across a wide variety of sectors.

The survey was conducted after President Donald Trump signed a pair of proclamations that impose tariffs on imported steel and aluminum, but before the announcement on March 18 that the United States will seek trade penalties of up to $60 billion against China for intellectual property theft.

The chief financial officers voiced strong opposition to metals tariffs, especially in the broader context: potential retaliatory moves taken by other countries. “The impact direct from steel/aluminum tariffs would be negligible,” said one CFO respondent. “The indirect impact from retaliation could be significant.”

Almost two-thirds of respondents (65.8%) say the tariffs will have a negative impact on their companies, and even more (86.9%) say they will have a negative impact on both the U.S. and Chinese economies.

The CFO Council’s outlook for GDP has been downgraded amid the increased tariff fears, including in three key global economies. Canada, China and Japan were downgraded from “improving” to “stable” by CFOs.

Still, the United States was rated as “improving” for the seventh straight quarter, while the Euro zone was seen as “improving” for the fourth straight quarter. No region was seen as worse than “stable,” a trend that has now held for five quarters.

Research contact: @DavidSpiegel

U.S. voters give thumbs down to steel and aluminum tariffs

March 9, 2018

Half (50%) of American voters oppose tariffs on steel and aluminum, while 31% would support such a trade agenda, according to the results of a Quinnipiac University poll of 1,122  adults nationwide released on March 6.

In addition, the U.S. electorate disagrees, 64% versus 28%, with President Donald Trump’s claim that a trade war would be good for nation and easily won, according to the research findings.

Every listed party, gender, education, age and racial group oppose steel and aluminum tariffs, Quinnipiac reports—except for Republicans, who support tariffs by a lackluster 58% versus 20%; and white voters with no college degree, who are divided, 42% versus 40%.

If the tariffs were to raise the cost of goods that Americans purchase, the opposition would mount, according to poll respondents. Indeed, American voters would oppose such tariffs 59% versus 29 percent, if they had to pay higher prices as a result.

Still,the tariffs will be good for American jobs, 26% say—while 36 % say tariffs will be bad for jobs and 24% say the tariffs will have no substantial  impact on jobs.

Finally, Quinnipiac reports,American voters disapprove 54% versus 34% of the way in which the Trump administration is handling trade. Only Republicans and white voters with no college degree approve.

Research contacttimothy.malloy@quinnipiac.edu