Business

US President Donald Trump warns China not to retaliate against tariff hike

Share
U.S. President Donald Trump and Chinese President Xi Jinping meet after the G20 in Buenos Aires

Following the increase of the tariff rate, Trump issued a bold threat to China by stating that the United States is "right were we want to be with China".

"We're in terrific shape in order to correct 20 years plus of unfair trading practices with China", Kudlow said.

The higher tariffs from the US and China's response that it would take "necessary countermeasures" rattled investors Friday who had been hoping for a quick resolution to the dispute.

Tariff toll: Workers producing U.S. flags at a factory in China. The administration has already hit $50 billion of additional Chinese goods with 25% duties. Mr Trump tweeted, adding that tariffs can be avoided if manufacturers shift production from China to other countries. "Then of course the president is going to have to make the final decision on that".

Yet Carl Weinberg, chief global economist at High Frequency Economics, a forecasting firm, pointed out that many goods made in China aren't manufactured elsewhere.

US importers pay tariff charges, though large retailers might be able to force some Chinese suppliers to cut their prices to offset the duties.

"So if you need that new iPad, it is you who will be paying the import duty, not some worker in China", Weinberg wrote in a research note. "But news flow today suggests this could take more time and is unlikely to be concluded until late June", said John Woods, Hong Kong-based chief investment officer of APAC at Credit Suisse AG.

Trump's surprise May 5 tariff announcement renewed anxiety in financial markets about global economic growth.

That was followed by China's early-May move to - according to US officials - backtrack on its agreement to enshrine concessions in law, offering instead to issue directives by the State Council. He is now vice-chairman of the China Centre for International Economic Exchanges, a think tank linked to the Chinese government.

Asian stock markets fell sharply Monday, European shares also declined and US stock futures suggested a significantly lower opening in NY.

The latest round of US-Chinese trade negotiations ended in Washington on Friday without a deal.

"The expected countermeasures have not yet materialised. Again, both sides will suffer on this", Kudlow said.

Last week's talks between Vice Premier Liu He, Xi's top economic emissary, and U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, were focused on that changing commitment but made little progress, according to people familiar with the discussions.

Taylor said China's attitude towards the tariff hike meant that China will not tolerate anything less than an equal standing in the negotiations.

Beijing previously set additional rates of 5% and 10% on 5,207 US products worth $60 billion in September, and warned at the time that it would counter any higher tariffs imposed by Washington on Chinese products. -Chinese trade balance. Regulators have been targeting American companies in China by slowing down customs clearance for shipments and processing of business licenses.

Separately, Beijing reportedly threatened to kick USA aircraft maker Boeing from the country's market as part on the ongoing trade dispute.

Share