Business

EVs could get more expensive as United States trade war heats up

Share
The German share price index DAX graph at the stock exchange in Frankfurt

Washington and Beijing resumed their tariffs battle earlier this month after trade talks in Washington ended without a deal, with the USA side accusing Chinese negotiators of reneging on previous commitments.

"You had a market that was feeling as though President Trump would want to do a deal so that the economy would not be hurt", said Tom Martin, senior portfolio manager with Globalt Investments.

U.S. President Donald Trump and China's President Xi Jinping chat as they walk along the front patio of the Mar-a-Lago estate after a bilateral meeting in Palm Beach, Florida, U.S., April 7, 2017.

The Trump administration has issued orders to curtail Huawei's access to American components it needs for its equipment - though a 90-day reprieve was issued.

China's commerce ministry said it would roll out the detailed measures against companies on the list shortly, noting foreign firms that break contracts, cut off supplies or take other discriminatory measures against Chinese firms would be included.

"It's potentially putting companies in a situation where they are forced to choose between the U.S. and China and that could definitely backfire on them", said Polk.

Former Chinese officials warned Friday that the trade war could last decades.

The US Trade Representative's office in a May 15 Federal Register notice set a June 1 deadline for those goods to arrive in the United States, after which US Customs and Border protection would begin collecting the 25 percent duty rate at US ports.

What's more, Trump is now taking a similar protectionist stance against Mexico-one of the U.S.'s closest and largest trade partners-with Thursday's surprise Twitter announcement of a 5% tariff on all Mexican imports, which he said would "gradually increase until the Illegal Immigration [sic] problem is remedied".

"The fact that the president is willing to use tariffs as a weapon can really cause damage to business confidence", Hodge said.

Speaking at a defence and security conference in Singapore on Saturday, the acting U.S. defense secretary said Huawei was "too close" to Beijing, creating "too much risk". "China has national policies and laws where data is required to be shared", Patrick Shanahan told the forum.

Earlier this month, Washington slapped additional tariffs of up to 25% on $200 billion (159.06 billion pounds) of Chinese goods, accusing Beijing of reneging on its previous promises to make structural changes to its economic practices.

Washington's tariffs appear to have already had an impact on Chinese manufacturing activity, which contracted more than expected last month.

The United States began collecting higher 25 percent tariffs on many Chinese goods arriving in U.S. seaports on Saturday morning in an intensification of the trade war between the world's 2 largest economies and drawing retaliation from Beijing.

The new front in the trade war is hitting automakers particularly hard. "The answer is no mystery", the paper said, according to USA Today.

Share