Trump warns China not to retaliate against tariff hike

Erika Holt
May 15, 2019

The benchmark is still down more than 4 per cent since the president escalated the trade war on May 5.

US stocks extended a rebound from the worst rout in four months as President Donald Trump moved to reassure markets that he'll clinch a trade deal with China. Its state media kept up a steady drum beat of strongly worded commentary, reiterating that the door to talks was always open but vowing that China would defend its national interests and dignity.

Trump has said he is in no rush to finalise a deal with China.

Still, perhaps the best indicator of how bad trade policy is encouraging more of the same is the fact that farming lobbyists are now asking for more protection from foreign agricultural goods, even as the same industry is pushing the Trump administration to end the trade war with China.

Trump also denied talks with China had broken down after Washington punctuated two days of negotiations last week with another round of tariffs on Chinese imports, with Beijing following suit on Monday with higher tariffs on USA goods.

WASHINGTON: The US-China trade war escalated Monday as Beijing announced it would raise painful tariffs on $60 billion in US exports by next month, responding in kind to President Donald Trump's decision last week to hike duties on hundreds of billions of dollars in Chinese merchandise.

Trump's advice that American customers can buy alternatives in domestic market or from non-tariffed countries is thus unrealistic in the era of global integration.

"The trade war is driving markets at the moment", said Rory McPherson, head of investment strategy at Psigma Investment Management in London.

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On Friday Mr Trump tweeted that tariffs on $250bn of goods coming into the U.S. were being paid "by China".

On Monday, the Dow Jones Industrial Average fell 2.4% and the tech-heavy Nasdaq lost 3.4% in its biggest drop of the year. The U.S. increases apply to Chinese goods shipped since Friday, and those shipments will take about three weeks to arrive at U.S. seaports and become subject to the higher charges.

In addition to rising costs, Parker tells NPR's Morning Edition, "The reputation of US companies as reliable suppliers has also taken a hit".

According to the U.S. Census Bureau, in 2018, China imported into the United States $2.09 billion in jewelry, $233 million in gem diamonds, and $1.01 billion in gemstones.

But that just takes into account the increased cost of buying things produced in China. But he said "there is no doubt" that diminished sales of farm products to China have hurt his home state of Missouri and other parts of the agrarian U.S. Midwest. The sell-off accelerated on Monday after China announced plans for retaliatory tariffs. "They are not victims of China's 'unfair competition.'", it said.

Paul told ABC, "I know of a big, prominent company in Kentucky that said the tax cuts significantly helped them, but that the tariffs are nearly equal in punishing them". "China's countermeasures have shown our determination to safeguard the multilateral trade system". "They have not been fair traders".

But when asked whether China was making preparations for a possible Xi-Trump meeting, Geng said: "I have no information at present about the specific question raised". Often, however, the critics incorrectly insist that the costs of those tariffs must be fully passed on to American consumers in the form of higher prices.

According to The New York Times, these tariff increases are likely to be passed down to consumers and could "severely disrupt" United States retailers - especially small businesses.

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