China set to respond to new round of USA tariffs

China set to respond to new round of USA tariffs

The Chinese government announced it plans to levy a 25 percent tariff on old corrugated cardboard (OCC) and other recovered fiber, as well as scrap plastic, in retaliation of the latest USA tariff proposals.

China announced last Friday it plans to impose tariffs of up to 25 percent on $60 billion of US goods as the trade salvos between the world's two largest economies continued. As Beijing has matched Washington's tariffs, $100 billion worth of trade between the U.S. and China will now be subject to the tariff hike. Through the first six months of 2018, the total of USA scrap exports to China was $2.2 billion, a decrease of 24 percent from the same time frame past year. The Times says that Beijing is looking into an option to "finance more research and development, instead of paying for the immediate construction of a lot of factories" because that fits better with World Trade Organization rules, but WTO rules are "more vague on whether a state-run banking system can provide preferential loans" to strategic companies, and those kinds of investments have become central to Chinese industrial policy.

While trade tensions are being ratcheting up, China's trade surplus with the USA stood at $28.1bn in July, close to the record-high in June, data released yesterday showed. For decades after 1949, when New China was founded, the domestic wholesale and retail proceeds were much higher than gross export earnings.

"China is taking the trade wars into the bedroom".

But within the administration, there is growing unease over where the US-China tussle is headed. Beijing has retaliated against the US tariffs with higher duties on a similar amount of American goods. "This is like a blind, drunken bull crashing into a China shop", he said.

China says it can weather the storm and official data on Wednesday backed up that claim.

"Some people selfishly swim against the tide and act against morality, wantonly raising the barrier of tariffs and waving the stick of hegemony everywhere", it said. In 2017, the Administration launched a self-initiated Section 301 investigation with an in-depth probe into Chinese practices related to forced technology transfer, unfair licensing and intellectual property (IP) policies and practices. The Chinese FDA (CFDA) proposed the provision of conditional approval for the urgently needed therapies and orphan drugs, along with market access benefits for new drugs.

Trump doesn't care. He seems eager to find the pain points of trade partners, and China in particular.

The view in Beijing is that the United States objective is not primarily the reduction of the trade deficit but the subordination of the Chinese economy to the USA, turning it into an "economic vassal".

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However, the USA imports far more from China than it exports to it, meaning Beijing may at some point need to look for other means of retaliation.

While Trump is claiming the United States is "winning" the trade war because of growing problems in the Chinese economy, the prospect of a significant downturn is striking fear among many countries in South East Asia that are dependent on Chinese markets. Its effects were in some cases equivalent to the 1930s Great Depression in the West, and could have been even worse had the Chinese currency been devalued. Chinese state media has hit back at the light of the levies that have been threatened, saying the Asian nation would retaliate.

The trade dispute between the two is already impacting a range of industries, from steel to cars, and causing tension over which products could be targeted next. While this tariff threat has been put on hold following talks between Trump and European Commission president Jean-Claude Juncker last month, it has not be removed.

The additional tariff on US LNG could have a chilling effect on US investment and on shale developers' decisions on whether or not to sign more LNG supply contracts with China.

China's box office revenue rose 13.45 percent previous year to 55.91 billion yuan ($8.6 billion), accelerating after a sharp slowdown in 2016.

"If China implements tariffs on US LNG imports, we would expect to see spot LNG prices move higher in the short-term", ANZ bank said on Friday.

But China has notched a pair of concrete victories in the trade showdown, according to Jeff Moon, a former United States trade negotiator in the Obama administration.

With a crush rate of 1.67 million mt and stocks of 8.8 million mt, China has more than five weeks' worth of soybean consumption.

Any such agreement would still need to be reconciled with Canada, the third party in the original 1994 North American trade accord.

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