Friday, July 06, 2018

China Trade - Trump Pulled The Trigger

Last Update: July 7

U.S. president Donald Trump fired the biggest shot yet in the global trade war by imposing tariffs on $34 billion of Chinese imports. China immediately said it would be forced to retaliate.

The duties on Chinese goods started at 12:01 a.m. Friday in Washington, which is just after midday in China. Another $16 billion of goods could follow in two weeks, Trump earlier told reporters, before suggesting the final total could eventually reach $550 billion, a figure that exceeds all of U.S. goods imports from China in 2017.

U.S. customs officials will begin collecting an additional 25 percent tariff on imports from China of goods ranging from farming plows to semiconductors and airplane parts. China’s officials have previously said they would respond by imposing higher levies on goods ranging from American soybeans to pork, which may in turn prompt Trump to raise trade barriers even higher.

[Quotations from Bloomberg on July 6, 2018]


Shen Jianguang: The key to winning the Sino-US trade war.


[Shen Jianguang is a well-known columnist on economic subjects with an interesting academic career.]

The Sino-US trade war is only at its beginning, and there are still many variables in its future evolution depending on the economic situation of the two countries, the political "game", the international battlefield and other factors.

[CAIXIN 财新,a Chinese publication on economics and financing on July 6, 2018]


Internal worries and external trouble; - which of both causes more headache for America ?


One needs to know that among US import market shares China accounts for about 21%, the European Union for 18% and Mexico / Canada for 13%. If America wants to wage a trade war against trading partners that exceed 60% of US import share, it will really be difficult to obtain benefits, and America will face difficulties in import substitution and a rising inflation rate. And if those countries collectively opposed US trade sanctions, they would cause a negative impact on US economy and employment.

[SINA Economics and Finance 新浪财经 on July 6, 2018]

.......... in recent decades the development of integrated supply chains has allowed countries around the world to concentrate on economic activities in which each holds a comparative advantage. In short, global supply chains mean countries can focus on what they do best. The result has been marked increases in productivity, widespread economic growth and big improvements in material living standards around the world.

By launching a trade war that threatens to disrupt these supply chains, Trump would in effect be attempting to roll back the tide of globalisation that has propelled global economic growth.

Although some countries would fare better than others in the conflict, emerging as winners in relative terms, the resulting slowdown in global trade and investment would clearly damage overall world economic growth, and could even lead to a contraction in the world economy as a whole.


The optimists hope the US president is bluffing, and that he intends to fight no more than a phoney war before settling for a showpiece settlement, as he did with North Korea.

In the pessimists’ view, Trump regards international trade as a zero-sum game, which for too long the US has been losing. To Trump, if tariffs inflict losses on other countries, the US will be the winner.

The coming weeks and months will determine which version is correct (and it is possible the US president himself does not know). In the meantime, however, the damage already done to trust in the global trade regime and to confidence in international investment suggests that the global economy as a whole is likely to be the big loser.

[South China Morning Post on July 7, 2018]

US experts: Winning trade wars is a myth.


Network News Blog: The Trade War World Cup - Trump will Tear Apart WHO and Kick NATO ?

[GUANCHAZHE (The Observer) 观察者 news blog quoted on July 7, 2018]


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