Donald Trump indicates no end in sight to trade war
US President Donald Trump has continued to hit out at China days after announcing another round of tariffs, signalling the trade war won’t end any time soon.
“It’s time to take a stand on China,” he said. “We have no choice. It’s been a long time. They’re hurting us.”
Mr Trump’s biggest strike yet in a growing trade fight between the world’s biggest economies will see a 10% duty applied to $200bn (€170bn) of Chinese imports, which could rise to 25% next year. He’s threatened duties on a further $267bn of made-in-China goods, which would hit nearly all other consumer products including mobile phones, shoes, and clothes.
The latest round of duties comes on top of a 25% tariff already imposed on about $50bn in Chinese goods, which spurred counter- tariffs from Beijing. China plans to retaliate on the US’s $200bn tariff round by slapping levies on $60bn of American goods.
Officials in Beijing worry Mr Trump’s latest tariff salvos mark a steady march towards a long-term competition that could thwart China’s rise.
Mr Trump’s latest comments and the ascendancy of China critics within his administration will only compound such concerns.
Adding to frictions, China yesterday demanded the US withdraw penalties it placed on a defence agency and its director for purchasing Russian weapons in violation of American sanctions or “bear the consequences”.
The Trump administration hasn’t put a process in place for companies to get exemptions from the most recent tariffs it is imposing, unlike earlier rounds of the duties. The US has justified its decision by saying that it is giving companies more than three months to transition their supply chains away from China before the tariff rate increases.
The decision is likely to put additional pressure on US companies that say Mr Trump’s trade dispute with Beijing is increasing uncertainty and boosting costs.
US industry groups, including the National Retail Federation, have been pushing the administration to spare firms and consumers from import tariffs.
Companies cannot shift their supply chains on a dime. It takes months, if not years, to find new suppliers who can meet all of a retailer’s sourcing requirements,” said Jonathan Gold, the federation’s vice- president of supply chain and customs policy.
“These tariffs will unfairly punish US companies and, ultimately, US consumers.
We have a recent survey of our membership, and three-quarters of our companies are going to be hurt by the US tariffs,” said William Zarit, chairman of the American Chamber of Commerce in China.
The administration argues that tariffs give the country leverage as it pushes China to reduce trade barriers and protect US firms from unfair practices, such as theft of intellectual property.
Despite the trade war escalation talk, US stocks looked poised for a second straight weekly gain amid continued calm. The bullish mood that has characterised most of the week continued to buoy global equity markets. Stocks rallied in Europe and Asia.
The euro slipped from a three-month high after data showed eurozone expansion edged lower in September.
Sterling slumped after Theresa May said the UK and the EU were “at an impasse” on Brexit.
