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Here’s why the market is looking past the trade war

Here’s why the market is looking past the trade war

One top Chinese official has warned darkly that the country could cut off exports of key components to USA manufacturers if tensions worsen.

This week saw an escalation in the tit-for-tat trade war between the United States and China.

This means the additional levies will hit more than half of United States goods from China - its largest source of imports. "The immediate impact will be to raise prices on consumers and tax American business and manufacturers".

"Both sides believe they can outlast the other, fearing any conciliatory move will be viewed as weakness and reduce negotiating leverage", said Wendy Cutler, a former US trade negotiator who is a vice president at the Asia Society Policy Institute.

In Jiangsu province on China's east coast, E.D. Opto Electrical Lighting Co. dispatched a batch of auto lights by sea to Los Angeles in late August, earlier than planned. The company is racing to complete an order for another US customer who's prepared to pay extra for air freight if it means dodging the new tariffs, she said.

If tariffs on the additional $267 billion of Chinese imports are put in place, the total hit from the administration's trade fight with Beijing could slow USA economic growth by a third, to roughly 2 percent, in 2019, Daco estimates.

By 1 August, reports circulated that Trump's team was considering raising the proposed tariffs on $200bn in Chinese goods - first announced on 18 June - from 10% to 25%.

What is most disquieting for the Trump administration is the dissatisfaction of voters in the Midwest and the suburbs.

According to the trade group representing U.S. businesses in China, half of the American companies operating in the country are anxious there will be a "strong negative impact" from the recently escalated trade dispute.

Death toll rises to 11 as Florence continues battering US East Coast
North Carolina officials have reported at least seven storm-related fatalities with unconfirmed reports of a further three deaths. He says waiting out a storm can also deplete resources. "There is flooding "everywhere in the city", he said".

Background: China cut tariffs on almost 200 consumer products in December 2017. That means reducing its discrimination against foreign companies, adhering to the spirit as well as the letter of its World Trade Organization obligations and halting the forced transfer of US technology to local Chinese partners.

China supplies the majority of America's rare earth materials.

Li went on to say that the world's multi-lateral trading system should be upheld, and that unilateral trade actions will not solve any problems. For small high-tech toys that have higher retail selling prices, some clients are willing to upgrade from sea freight to air, he said. It has other options, even when it runs out of US imports to tax. Imports to Northern California's Port of Oakland surged 9.2 percent in August. As counterintuitive as it might seem, the president sees this fact as ultimately helping USA workers. (It's the importer who pays the tariffs.) The same goes for United States exports to China, which are only one-sixth of total American exports.

Mema said it feared an escalating back-and-forth trade dispute with a major partner would not resolve the issue at hand, however.

"We don't want others to interfere in our domestic politics, and we will not interfere in the domestic politics of others", Geng said at a regular press briefing.

Click the audio player above to hear the full story. The company warned that American consumers will end up being the ones hurt by the $200 billion in new tariffs on Chinese goods.

Chinese white goods firm Haier Group, which acquired General Electric's home appliances businesses two years ago, has halted plans to sell products made in the United States by the GE Appliances brand in China, Financial Times cited the group's chief executive Zhang Ruimin as saying. There's not much he can do about paying the 10 percent duty, or $30,000, on those vehicle-lighting parts.

There is speculation that China may use the advantageous announcement to leverage its position against US$200 billion in tariffs from the US.

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