The first round of President Donald Trump’s 25 percent punitive tariffs on China will hit $50 billion in goods starting August 23, the government announced Tuesday.
Washington already imposed tariffs on $34 billion in Chinese products on July 6. But it held off on a final $16 billion as a result of concerns raised by US companies.
Although the move was expected, it cements the view that there appears to be no effort underway to defuse the dispute between the world’s two largest economies.
China has already retaliated with duties of its own, and has pledged to match the US dollar for dollar with new tariffs.
The dispute has continued to escalate as the sides exchange threats, and Trump last week threatened to jack up the tariff rate on the next $200 billion in Chinese imports it plans to target to 25 percent, from the planned 10 percent.
China fired back warning it would impose duties on $60 billion in US goods.
The office of US Trade Representative Robert Lighthizer said its “exhaustive” investigation showed “China’s acts, policies and practices related to technology transfer, intellectual property and innovation are unreasonable and discriminatory and burden US commerce.”
USTR said there were 279 new goods to be targeted in the dispute over China’s policies promoting theft of American technology.
Those include imports like motorcycles, tractors, railroad parts, electronic circuits, motors and farm equipment.
US industries and farmers have been caught in the crossfire, and the Trump administration announced $12 billion in aid to help farmers hurt by duties on crops such as soybeans.
Asian markets mostly rose Wednesday, building on a positive start to the week as investors are cheered by healthy earnings but uncertainty caused by the US-China trade row is keeping optimism in check.
Wall Street provided another strong lead with the Nasdaq approaching a record high, while energy firms in Asia pressed on with their rally following more gains in oil prices.
Hong Kong was 0.1 percent higher in early trade while Tokyo ended the morning session 0.4 percent up and Sydney edged 0.3 percent ahead. Seoul, Wellington and Taipei all posted gains but Shanghai dipped 0.6 percent.
While the gains are welcome, traders remain on edge for any new developments in the trade saga between the world’s top two economies.
On Tuesday the US said Donald Trump’s 25 percent tariffs on a further $16 billion of Chinese goods will kick in on August 23. That is on top of the measures imposed on $34 billion of imports last month.
The move had been widely expected but with China lining up retaliatory measures it reinforced worries that the two sides are heading for an all-out trade war that could hammer the global economy. The White House has also lined up another $200 billion to target in future.
The yuan got some support after a Bloomberg News report said the Chinese central bank had emphasised the need for currency stability to the country’s lenders as it looks to halt a slide in recent months.
It said officials called on bosses to prevent “herd behaviour” and momentum-chasing moves in the forex markets, fearing a run on the yuan similar to 2015-16, which hammered the unit and sent global markets into a tailspin.
The report comes after Friday’s move by the People’s Bank of China to make it harder to bet against the currency.
“This move is consistent with what the PBoC did earlier — it can be considered as preemptive efforts made to slow the yuanâ€™s depreciation, prevent one-sided bets on weakness and avoid a sense of panic,” Eddie Cheung, Asia foreign-exchange strategist at Standard Chartered in Hong Kong, told Bloomberg.
Energy firms remain popular as oil prices rise on the back of worries about the trade row and a drop in Saudi Arabian output.
Both main contracts were flat in Asia after clocking up big gains on Tuesday.
Prices also got support from the US reimposing a first round of sanctions on Tehran after leaving the nuclear deal, with an embargo on the country’s crude exports in November.
Trump warned other countries against doing business with Iran in the face of the sanctions, saying they would be refused from trading with the United States.
Latest posts by S. Jack Heffernan Ph.D (see all)
- Juddmonte Grand Prix de Paris at ParisLongchamp - April 22, 2019
- Australia’s Horse Racing and Breeding Industry Needs Strong Political Representation - April 13, 2019
- Ben Currie Vs Darren Weir: Extremes are Hurting Australian Racing - April 12, 2019