Published: Mon, August 06, 2018
Global Media | By Derrick Guzman

Trump Says Tariffs Are Working, U.S. And China Are Talking

Trump Says Tariffs Are Working, U.S. And China Are Talking

Countries like Malaysia form an integral part of Chinese exporters' supply chains, and analysts have warned a trade war could knock billions of dollars off their economic growth in coming years.

He added that Chinese stocks are down, weakening that nation's bargaining power in the escalating trade war.

Threats and even announcements of tariffs are one thing; the actual implementation of tariffs another.

"The in a better position to ride through the tariff concerns because of a strong economy", said Sung Won Sohn, chief economist at SS Economics in Los Angeles.

June 17: Trump announced he was imposing a 25 percent tariff on $50 billion worth of goods from China. Mr Trump suggested that his use of tariffs has directly damaged the Chinese economy, something that he said would continue unless they agreed to his demands, which includes allowing more USA exports and investments.

On Saturday, President Donald Trump praised his tariff plan and insisted, "steelworkers are working again, and big dollars are flowing into our Treasury". But in the meantime, foreign nations are imposing tariffs on some USA goods such as soybeans and whiskey. USA steel-aluminium tariffs on imports from Mexico-Canada have elicited a token response of $15.8 billion in Mexican and Canadian tariffs on United States imports. It is much more rational compared with the 25 percent tariff hikes threatened by the United States. which is a trade "stick", " said Li Yong, a senior research fellow at the China Association of International Trade. "The implementation date will be subject to the actions of the USA, and China reserves the right to continue introducing other countermeasures". US Trade Representative Robert Lighthizer last week called trade tensions a "chronic problem" that would likely take years to resolve. On Friday, U.S. data showed the merchandise trade gap with China widened slightly in June to $32.5 billion after May's $32 billion deficit.

Trump campaigned on a promise to bring down America's massive trade deficits by renegotiating trade agreements and getting tough on countries like China that sell the US far more than they buy from it.

And that devaluation will nearly certainly quickly go global - given the current significant decline in currency exchange rates already taking place throughout various throughout key emerging market economies (Argentina, Turkey, India, etc.).

Talks with China and Canada, however, have remained very frosty, and Trump has promised to punish both economies if he doesn't get his way.

This latest move comes after it emerged Donald Trump's administration is considering hitting £154bn ($200bn) of Chinese imports with additional levies.

While he might be able to backtrack and quickly close trade deals with NAFTA partners and Europe - just as he settled a quick, token deal with South Korea early this year - the settling of a quick trade deal with China may not prove so easy.

At a time when China is opening its domestic market to more foreign trade and investment than at any time in China's modern history, policy makers in Beijing have opted to retaliate against America's ongoing tariff onslaught in a manner that will force USA producers to apprehend the reality that in a prolonged trade war of Washington's own making, United States industries will be the penultimate victims.

China wants to find a negotiated solution to the two sides' trade policy differences, but also could not simply ignore Trump's threat earlier this week, Tu added. Trump is the one who froze those negotiations for a Transatlantic Trade and Investment Partnership, in order to launch his trade war.

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