China Retaliates to US Tariffs With $60B Tariffs on US products

China is to slap tariffs on an additional $60bn (£46bn) of imports from the US in retaliation against $200bn of new trade sanctions on Chinese goods announced by Donald Trump.

The latest moves represent a new step towards a full-scale trade war between the world’s two biggest economies. Further escalation is deemed likely because Trump is facing low approval ratings ahead of the US midterm elections in November, while China will not want to be seen to back down.

Trump announced his latest escalation of the bitter trade standoff late on Monday, promising to introduce the additional border taxes of 10% on Chinese goods from next week.

Via The Guardian

Trump Leaves Door Open to Deal with China

President Donald Trump on Tuesday left the door open for China to negotiate an end to the trade war between Washington and Beijing, a day after imposing new tariffs on nearly $200 billion Chinese imports and threatening more if China retaliates.

Speaking to reporters during a visit with Polish President Andrzej Duda, Trump said that the United States may make a deal at some point with China and that his country is always open to talking.

via Reuters

Canadian Foreign Ministers to Renew NAFTA Talks on Wednesday

Canadian Foreign Minister Chrystia Freeland will hold fresh talks on renewing NAFTA with U.S. Trade Representative Robert Lighthizer in Washington on Wednesday, a spokesman for Freeland said on Tuesday.

Freeland told reporters on Monday she would be meeting Lighthizer this week in another attempt to settle disagreements between the two countries over the trilateral North American Free Trade Agreement.

U.S. President Donald Trump last month announced a side deal with Mexico – the third member of the pact – and has warned Ottawa that he is prepared to leave Canada out if it fails to accept terms more favorable to the United States.

via Reuters

US Commerce Secretary Wilbur Ross Says Trump Would Like Canada to Join Trade Deal with Mexico

President Donald Trump would still like Canada to join the trade deal that the U.S. crafted with Mexico, Commerce Secretary Wilbur Ross told CNBC on Tuesday.

However, the U.S. is moving forward on the bilateral Mexico agreement, Ross said on “Squawk Box.”

The United States Trade Representative office “already filed with the Congress the notice regarding the transaction with Mexico,” Ross said. He said the details should be made public “very shortly,” after the consultation period ends.

Ross said the filing also indicated the U.S. would be “totally happy” if Canada were to get on board and make the deal trilateral, like the one it’s replacing, the 1994 North American Free Trade Agreement.

“If they don’t, we’ll simply go ahead with Mexico,” said the Commerce secretary, who before joining the White House made a fortune buying stakes in distressed assets.

Last month, Trump announced the U.S.-Mexico pact, saying it will be called the United States-Mexico Trade Agreement.

via CNBC

China to penalize $60B of U.S. imports but reduce amount of tariffs it collects

China will levy tariffs on about $60 billion worth of U.S. goods in retaliation for the latest round of U.S. tariffs on Chinese products, as previously planned, but has reduced the level of tariffs that it will collect on the products.

The tit-for-tat measures are the latest escalation in an increasingly protracted trade dispute between the world’s two largest economies.

On Monday, the U.S. administration said it will begin to levy new tariffs of 10 percent on $200 billion of Chinese products on Sept. 24, with the tariffs to go up to 25 percent by the end of 2018.

Previously, U.S. President Donald Trump threatened to hit those goods with 25 percent tariffs immediately.

“China is forced to respond to U.S. unilateralism and trade protectionism, and has no choice but to respond with its own tariffs,” the Finance Ministry said in a statement on its website late on Tuesday.

China will levy tariffs on a total of 5,207 U.S. products, at 5 and 10 percent, instead of the previously proposed rates of 5, 10, 20 and 25 percent, even as the products remain unchanged from the previous plan, the finance ministry said.

China will impose a 10 percent tariff on U.S. products it previously designated for a rate of 20 and 25 percent, and 5 percent tariffs on goods previously under the 5 and 10 percent rates.

Items previously designated to be hit by 20 or 25 percent tariffs included products ranging from liquefied natural gas and mineral ores to coffee and various types of edible oil. Those goods will now be taxed 10 percent.

Goods previously marked under the 10 percent category included products such as frozen vegetables, cocoa powder and chemical products. Those products will now be taxed 5 percent.

The new tariff measures will take effect at 12:01 p.m. (0401 GMT) on Sept. 24.

China will further respond accordingly if the United States insists on increasing tariffs, according to the Finance Ministry.

Reuters

OIL wobbles on tariff announcement

Bloomberg) — Oil dipped below $69 a barrel as heightened trade tensions between the world’s biggest economies stoked fears over economic growth and energy demand.

Futures in New York dropped as much as 0.6 percent. U.S. President Donald Trump announced that he will impose a 10 percent tariff on about $200 billion in imports from China next week, and more than double the rate in 2019. That overshadowed lingering global supply risks as Iranian oil exports plunged to a 2 1/2-year low while analysts forecast U.S. crude inventories to have declined for a fifth week.

Oil has climbed more than 5 percent from the lows of August as looming U.S. sanctions on Iran start removing barrels, with buyers shunning imports from the Islamic republic before a November deadline. Still, the U.S.-China trade dispute is clouding the outlook for demand, and investors are closely watching whether OPEC and its allies will increase output when they meet to discuss strategy in Algeria on Sept. 23.

“Discussions around global demand in the wake of this morning’s tariffs and speculation of further OPEC supply increases should temper upside ambitions,” said Stephen Innes, Singapore-based head of trading for Asia Pacific at Oanda Corp. At the meeting in Algiers, members will be “most likely to discuss the supply disruption from Iranian sanctions, which is leading to speculation that further production increases will be presented at the meeting.”

 

Bloomberg

Copper melts

MANILA, Sept 18 (Reuters) – London copper drifted lower for a third session running on Tuesday as China vowed to respond to the latest U.S. tariffs on about $200 billion of Chinese goods, exacerbating the trade war between the world’s two biggest economies.

In imposing the new tariffs, U.S. President Donald Trump warned that if China takes retaliatory action against U.S. farmers or industries, “we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports.”

China’s commerce ministry said the country has no choice but to retaliate against the fresh U.S. tariffs and hopes the United States would correct its behaviour.

“We know China can’t go tit for tat as they don’t have enough U.S. goods to tax,” said Stephen Innes, head of Asia Pacific trading at OANDA brokerage.

“So, if there is a more heavy-handed approach such as flat-out import restriction or overtly weakening the yuan, it could certainly bring the big market bears out of hibernation,” Innes said in a note to clients.

Commodities Weekly: Copper nears 15-month low as fresh tariffs announced

CNBC via Reuters

China Ready to Retaliate if US Tariffs a Reality

China will not be content to only play defense in an escalating trade war with the United States, a widely read Chinese tabloid warned, as U.S. President Donald Trump was expected to announce new tariffs on $200 billion in Chinese goods as early as Monday.

The United States and China have already levied duties on $50 billion worth of each other’s goods in an intensifying row that has jolted global financial markets in the past few months.



Last week, the U.S. Treasury Department invited senior Chinese officials, including Vice Premier Liu He, to more talks on the tariff dispute, though scepticism remained high among trade observers on both sides over the prospects of a breakthrough.

China’s Foreign Ministry reiterated that the escalation of the trade conflict was not in anyone’s interest.

“We have always maintained that the only correct means to resolve the trade dispute is through dialogue and consultation on an equal basis with mutual trust and respect,” ministry spokesman Geng Shuang told a regular news briefing.

via CNBC

Dollar and Stocks Lower as Tariff Threat

A gauge of global equity markets eased and the dollar slipped on Monday as investors took a dim view of an expected new round of tariffs from Washington on Chinese goods, which would escalate a simmering U.S.-Sino dispute over trade.

U.S. President Donald Trump was expected to announce new tariffs on $200 billion in Chinese goods as early as Monday, and China has said it would retaliate.



A weaker dollar lifted gold prices and the price of most industrial metals slipped as the tit-for-tat dispute has fueled concerns that demand for metals will weaken.

Apple and Amazon.com bore the brunt of investor worries about the tariffs, which were on a list unveiled in July that included $200 billion worth of internet technology products, other electronics, printed circuit boards and consumer goods.

“Investors are slowly starting to realize that these new tariffs could be extremely disruptive to the supply chain,” said Art Hogan, chief market strategist at B. Riley FBR in New York.



via Reuters

Oil Lower Awaiting Trade and Iran Tensions

Oil prices were little changed on Monday as market participants weighed potential supply cuts from U.S. sanctions on Iran with deepening trade tensions between the United States and China that could dent global crude demand.


West Texas Intermediate graph

Brent crude futures rose 13 cents to $78.22 a barrel by 11:12 a.m. EDT (1512 GMT), while U.S. West Texas Intermediate (WTI) crude futures fell 8 cents to $68.91 a barrel.

“We believe that the full effect of the Iranian oil sanctions has yet to be seen and we feel that the next 5-6 week anticipatory phase of the official sanctions will associate with steady speculative buying interest,” Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.

Iran’s oil exports have been falling in recent months as more buyers, including its second-largest buyer India, cut imports ahead of U.S. sanctions that take effect in November. Washington aims to cut Iran’s oil exports down to zero to force Tehran to re-negotiate a nuclear deal.

via Reuters