Trump is due to unveil revisions to his initial tariff list targeting $50 billion of Chinese goods on Friday. The list will contain 800 product categories, down from 1,300 previously.
So it’s finally happening. The America-China trade war might just come true. In true reality television fashion, the erstwhile Celebrity Apprentice host Donald Trump, had teased and teased and teased this eventuality, and it appears that it is the next episode on the reality show we can’t seem to take our eyes off. They call it, ‘America: The Trump Years’. The ratings are through the roof. President Trump’s ratings on the other hand… not so much. On this episode of Editor’s Pick of the Day, we bring to you the latest from the frontlines of the America-China trade war.
Trump is due to unveil revisions to his initial tariff list targeting $50 billion of Chinese goods on Friday. The list will contain 800 product categories, down from 1,300 previously. Trump no longer believes that Beijing’s influence over North Korea is a compelling reason to ease up on trade talks now that his administration has opened up a direct line of communication with the nuclear-armed country, an administration official said. As Bloomberg reports, this move is likely to escalate trade tensions between the world’s two biggest economies.
The approved tariffs match the scale of duties proposed in April, suggesting Trump isn’t caving despite warnings that trade penalties may derail relations with China as the U.S. seeks to maintain pressure on North Korea over its nuclear weapons program.
related news
The Trump administration had prepared a refined list of Chinese products to be hit with tariffs that homes in on technologies where China wants to establish itself as a leader, according to sources.
Back in April, the U.S. Had released an initial list targeting close to 1,300 products worth $50 billion in Chinese imports. Some products were taken off the preliminary list but none were added, said one of the people familiar with the decision. Later today, the government is expected y to release an updated list of Chinese tariff targets. The White House has said the duties will be implemented “shortly” after the release of the list, though no date has been set.
This is mostly in keeping with his election campaign promises. Trump has spoken repeatedly about fulfilling his pledge to clamp down on what he considers unfair Chinese trading practices. But his calls for billions in tariffs could complicate his efforts to maintain China’s support in his negotiations with North Korea.
If he goes ahead with the tariffs, it could trigger a series of trade actions against China and lead to retaliation from Beijing, something that Beijing has already promised. Beijing has reiterated that it will respond “appropriately” to any measures imposed by the US, the Guardian reported. Al Jazeera reported that Chinese Foreign Minister spokesman Geng Shuang told journalists on Friday that China would fight back.
Geng said, "If the US side adopts unilateral measures of protectionism and damages China's interests, then we will respond right away, and take necessary measures to resolutely safeguard our own legitimate rights and interests."
Trump has already slapped tariffs on steel and aluminum imports from Canada, Mexico and European allies. The G7 was labeled G6+1 by pundits and comedians alike owing to Trump tariffs announced ahead of the meeting in Charlevoix, Quebec in Canada. After announcing that he would have the US taken off the communiqué, Trump went on a tirade against Justin Trudeau on Twitter. Trudeau, in a press conference, had earlier denounced American tariffs and had said that the Canadians may be mild-mannered and reasonable but will not be pushed around. Trump, in his tweetstorm, said Trudeau was dishonest and weak, and that he had switched positions after being “mild and meek” during the meetings. By most political accounts not called Fox News, the G7 was a “disaster”, and further proof that America, under Trump was hellbent on international isolationism.
On the same day that he was laying into Trudeau and Canada – America’s neighbours to the north and among its closest allies – Trump was busy extolling the virtues of dialogue with a dictator whom he had chosen to give legitimacy by agreeing to meet. Trump has reportedly always been put off by the German Chancellor Angela Merkel and thinks Theresa May is very much a “school-marm”. May, let us emphasise is Prime Minister of the United Kingdom, a country the US has a “special relationship” with. And Germany, one of the strongest US allies in the NATO. On the one hand, Trump is struggling to maintain good relationships with his peers from democratically elected nations and has resorted to name-calling and insulting; and on the other, after meeting with Kim Jong Un, he declared that the Chairman was “very clever, very capable.” Many analysts have remarked that Trump, through his actions and words, has demonstrated that he would rather befriend autocrats and dictators than elected leaders of democracies. In the past, he has expressed admiration for Rodrigo Duterte, the President of the Philippines who has been widely condemned internationally for his egregious human rights violations in the country. His support of extremely right wing, conservative, and “xenophobic” leaders in the EU is of course well-documented by The New York Times, The Guardian, and many other prominent publications. Marine Le Pen, Viktor Orban of Hungary (called the Donald Trump of the EU), have all received admiration from Donald Trump.
Donald Trump claims he has great relationships with all his peers on the international stage. To the casual observer, it would appear that he often forgets that we can see and hear.
The newly proposed tariffs against China risk starting a trade war involving the world’s two biggest economies. Again. But Trump has indicated that he will stick with his way of functioning. He said, “I have to do what I have to do” to address the trade imbalance.
Even as he was wrapping up the meeting with Kim Jong Un in Singapore earlier this week, he told the media the U.S. has a “tremendous deficit in trade with China and we have to do something about it. We can’t continue to let that happen.” The U.S. trade deficit with China was $336 billion in 2017. Trump then told Fox News in an interview aired on Wednesday that he was “very strongly clamping down on trade” with China. When asked how strong the measures would be, Trump had said, “Well, I think very strongly. I mean you’ll see over the next couple of weeks. They understand what we are doing.”
The American government has also indicated that other problems are involved in this decision. Administration officials have signaled support for imposing the tariffs in a dispute over allegations that China, or at least Chinese companies, steal or pressure foreign companies to hand over technology, according to officials briefed on the plans. The US administration’s trade hawks, including U.S. Trade Representative Robert Lighthizer and White House trade and manufacturing adviser Peter Navarro, have been pushing for a tougher approach to the negotiations to address U.S. allegations that China has misappropriated American intellectual property through joint venture requirements, state-backed acquisitions of U.S. technology firms and outright theft.
The U.S. and China have been holding ongoing negotiations over the trade dispute. The United States has criticized China for the aggressive tactics it uses to develop advanced technologies, including robots and electric cars, under its “Made in China 2025” program. The U.S. tariffs are designed specifically to punish China for forcing American companies to hand over technology in exchange for access to the Chinese market.
Trump’s decision could jeopardize China’s pledge to buy some $70bn in US farm and energy exports as part of talks aimed at avoiding a trade war. Commerce Secretary Wilbur Ross earlier this month met with Chinese officials in Beijing and brought back a Chinese proposal to purchase around $70 billion worth of additional commodities and manufactured goods. But that offer has not been accepted by Trump, according to Reuters.
What do the stock markets make of this development? Wall Street has viewed the escalating trade tensions with wariness, fearful that they could strangle the economic growth achieved during Trump’s watch and undermine the benefits of the tax cuts he signed into law last year. Markets have just about opened in Europe, and they are not exactly chirpy. As of my telling, only France’s CAC appears to be bucking the trend, up 0.17%. Britain’s FTSE, Germany’s DAX, the pan-European Stoxx 600 are all trading in the red.
Gary Cohn, Trump’s former top economic adviser, said, "If you end up with a tariff battle, you will end up with price inflation, and you could end up with consumer debt. Those are all historic ingredients for an economic slowdown." Steve Bannon, widely acknowledged to be the architect of Trump’s victory and his former White House adviser, said the crackdown on China’s trade practices was “the central part of Trump’s economic nationalist message. His fundamental commitment was that he was going to bring manufacturing jobs back, particularly from Asia.”
Under the 1974 trade law that Trump invoked to pursue a tariff investigation into China’s intellectual property practices, he could delay the activation by 30 days. He can also delay the tariffs by another 180 days if the U.S. Trade Representative’s office finds that negotiations with China are yielding progress. So there is still about fifteen days to course-correct. Unless it is a poker move to see how China would respond.
The Chinese, like we said, have of course threatened to hit back. Chinese officials have said they would drop agreements reached last month to buy more U.S. soybeans, natural gas and other products. China has targeted $50 billion in U.S. products for potential retaliation. Chinese foreign ministry spokesman Geng Shuang said, "We made clear that if the U.S. rolls out trade sanctions, including the imposition of tariffs, all outcomes reached by the two sides in terms of trade and economy will not come into effect."
Scott Kennedy, a specialist on the Chinese economy at the Center for Strategic and International Studies, said the Chinese threat was real and helped along by recent strains exhibited among the U.S. and allies. “I don’t think they would cower or immediately run to the negotiating table to throw themselves at the mercy of Donald Trump,” Kennedy said. “They see the U.S. is isolated and the president as easily distracted.”
Reuters reported that several industry lobbyists expect the move to come as early as today, with publication of a Federal Register notice.
Obviously, this episode is just one of many back and forth tit-for-tat tariff-related episodes on this telenovela. More shall come our way, because that is the way of reality television. It returns with the tedious inevitability of an unloved season, and well, because this is our life now – a life where the leader of the free world neither respects the sanctity of ‘freedom’ nor the unity of the ‘world’.
Thank you for joining us.