Trade War Watch – July 11, 2018
On Tuesday U.S. President Trump announced that he was going to start the process of implementing tariffs on another $200 billion of Chinese goods, and China responded quickly and harshly. On Wednesday, Beijing accused the United States of bullying and threatened to retaliate, though it did not specify its exact plans. Beijing also said that it would complain to the World Trade Organization (WTO).
“This is a fight between unilateralism and multilateralism, protectionism and free trade, might and rules,” foreign ministry spokeswoman Hua Chunying told a regular briefing on Wednesday.
According to the United States Trade Representative, which published an extensive brief on the newly proposed tariffs, hundreds of new products would be included across many manufacturing and export industries. Included on the list are electronics such as refrigerators, metals such as steel and aluminum products, and cotton textiles. Also included are beauty products such as cosmetics and shampoo, fish products including sardines, cod and tuna, and produce.
Among the other items on the list are bran, flours, vinegar and vinegar substitutes, animal food a range of tobacco products, chalk, coal and metal ores. The list spans nearly 200 pages and is extremely detailed in nature.
Not all of Trump’s Republican allies are in favor of the tariffs or the escalating trade war. Senate Finance Committee Chairman Orrin Hatch is among the detractors, as is the U.S. Chamber of Commerce.
“Tariffs are taxes, plain and simple. Imposing taxes on another $200 billion worth of products will raise the costs of every day goods for American families, farmers, ranchers, workers, and job creators. It will also result in retaliatory tariffs, further hurting American workers,” Reuters reported a spokesperson from the U.S. Chamber of Commerce as saying.
Investor optimism declined on Wednesday as both Beijing and Washington stepped up their efforts instead of looking for ways to negotiate a more mutually-beneficial resolution.