Confusion Hits Chinese Ports As Trump's Tariffs Go Into Effect

Despite frustration with Chinese trade practices, which require foreign firms to spill trade secrets to access the 1.3 billion-person market, USA businesses have warned for months that Trump's trade threats may do more harm than good.

Beijing has retaliated in kind, placing new charges on goods to the same value.

Mr Trump has already imposed tariffs on imported washing machines and solar panels, and started charging levies on the imports of steel and aluminium from the European Union, Mexico and Canada.

Economic Development Minister Maxim Oreshkin said in a statement Friday that additional tariffs ranging from 25 to 40 percent have been applied to some road construction equipment, oil and gas equipment, metal processing instruments, drilling equipment and optical fiber.

Under a full-blown trade war in which the United States slaps 10 per cent tariffs on all other countries and they respond, the economists reckon USA growth would slow by 0.8 percentage point by 2020. United States stocks are up slightly more than 2% this year as investors have weighed the threat of trade frictions against the strong performance of the U.S. economy.

That could include "a wide range of products as diverse as tool sets, batteries, remote controls, flash drives and thermostats", he said, adding, "a strategy based on unilateral tariffs is the wrong approach, and it has to stop".

The new tariffs will bring back a level of American protectionism that has not been seen since 1970 when the average charge stood at 6.5%. United States hiring topped forecasts in June, while the unemployment rate rose from an 18-year low and wage gains unexpectedly slowed.

Importers of American retail goods hit by higher Chinese duties were reluctant to pass the costs on to consumers for now.

The June jobs data show no evidence of trade fears hurting the USA economy, Council of Economic Advisers Chairman Kevin Hassett said in an interview on Friday.

It has increased sharply since 2001 when China joined the World Trade Organization and started to significantly improve its economic position and relations worldwide.

"The Trump administration also believes that at least starting a trade war is in its interests; the U.S. economy is strong enough to endure a crimp in trade, the president's domestic political standing is as strong as ever amongst Republicans, and pushing China hard on trade may help restore United States credibility on other issues", he added.

The Chinese currency, the yuan, has dropped 3.5 percent against the USA dollar over the past month, giving Chinese companies a price edge over their US competition.

States such as Louisiana export about $5.7bn of goods to China. Trump did very well with rural voters and the mid-west agriculture industry during his 2016 election run and the Chinese know this all too well.

That's what happened to imported washing machines, which were hit by separate Trump tariffs in January. If so, that could hurt many ordinary workers.

In the short term, analysts said, the moves may disrupt markets and hinder trade in both countries.

Since March this year, reports and lists have been being published, and cancelled, by both governments. The oilseed is the top agricultural commodity that the US ships to China by far and is among the largest products for overall exports.

The list avoids direct tariffs on consumer goods such as mobile phones and footwear. Meanwhile, some of the officials who previously worked for the Obama administration - known as "holdovers" - are hoping to tamp down the US-China conflict.

Mark Carney, the governor of the Bank of England, warned this week that further escalation of Trump's trade disputes would hurt the American economy most, with potential to lower USA economic growth by around 5%.

Data from the US Census Bureau show how the US economy has been heavily dependent on imports.

Vanessa Coleman

Comments