A retaliatory Trump tariff on the $ 2.1 billion of agricultural produce United States imports from India (including spices ($279 million), rice ($158 million), tree nuts ($157 million), essential oils ($151 million), and processed fruit & vegetables ($114 million)), won’t kill U.S. consumers or Indian exporters. “So they charge us 50, we would charge them 50”, Trump added. It has filed a challenge in the WTO against Washington’s latest trade measures.
However, the comments on Thursday by China’s foreign minister, Wang Yi, were a sign that Beijing would not take the introduction of tariffs lying down.
“China would have to make a justified and necessary response”, he said. “We hope both parties will find a mutually beneficial solution through equality and constructive dialogue”. On the other hand, China accounts for just 8% of USA exports, while the American economy is far less dependent on exports for jobs and economic growth than China is. We send our vehicle over there, pay 25 per cent.
Trade data are distorted by the Lunar New Year holiday, which falls at different times in January or February each year. But remember that the Chinese economy is hugely dependent on the American market, with almost 20% of Chinese exports landing here past year. We’re losing with China USD 500 billion a year.
India on Friday said it was willing to work with China to develop relations based on commonalities, while dealing with differences on the basis of mutual respect and sensitivity to each other’s interests. For the two-month period, the surplus expanded by 31 per cent from a year earlier to US$55.3b.
Trump’s declaration coincided with the signing by 11 countries of a new Trans-Pacific trade pact that the United States withdrew from a year ago.
“CISA appeals for the Chinese government to take resolute measures against imports of some U.S. products including stainless steel, galvanized sheet, seamless pipe, coal, agriculture products and electronic products”, the industry body said.
Trump is expected to announce the tariffs by week’s end.
Most affected will be the European Union and China, which are the top two United States trading partners, and which have threatened retaliation if Trump goes ahead with tariffs, resulting in a trade war and an all round increase in prices.
More than 100 Republican House members are urging Trump to reconsider the tariffs, warning of unintended negative consequences to American workers and the national economy.
Moreover, according to a statement by Alicia García Herrero, chief economist for Asia of French investment bank Natixis, Trump’s measures “point to wrong target” because steel and aluminum purchases account for only 3.5% of trade deficit with China.
USA companies have been urging the Trump administration to negotiate with Beijing before imposing any penalties, according to industry lobbyists.
The movement is not aimed only at China, but nobody escapes that Beijing can be one of main goals of protectionist darts of Trump in future considering that Asian giant is biggest responsible for bulky deficit American commercial. But broad tariffs directed at China would throw sand in those same engines, potentially giving Communist Party leaders the encouragement they need to make hard reforms.
“The US is taking this action justified on security grounds and that is very hard for the WTO to adjudicate”. They say he still sees the issue in purely business terms rather than through strategic lens.
Trade tensions between the world’s two largest economies have risen since Trump took office.
He was speaking after the European Union executive met to discuss a list of €2.8 billion ($3.5 billion) worth of US products – from bourbon to Harley Davidson motorbikes – on which Europe could apply a 25-percent tariff if Trump goes ahead. But Cohn’s resignation this week dealt a blow to that expectation.
The list so far includes United States steel and agricultural products, as well as other products like bourbon, peanut butter, cranberries and orange juice.
A looming trade war is certainly a downside risk to China’s near-term trade outlook, but opinions are divided on whether the latest round of tariffs on steel and aluminium, which now comprise only 3% of China’s exports, will create much of a disturbance.
“This is basically a stupid process, the fact that we have to do this”.
Source: Essential oils