Trump to impose tariffs on $200 billion in Chinese goods

Larry Kudlow REUTERS  Kevin LamarqueMore

Larry Kudlow REUTERS Kevin LamarqueMore

In the aftermath of the global financial crisis ten years ago, the leaders of the world's major powers pledged that never again would they go down the road of protectionism which had such disastrous consequences in the 1930s-deepening the Great Depression and contributing to the outbreak of world war in 1939.

The Trump administration will announce as early as Monday that it's imposing a 10 percent tariff on $200 billion of Chinese goods, which Beijing has already said it will retaliate against, according to three people familiar with the decision. That rate more than doubles to 25 percent on January 1, 2019.

The Wall Street Journal reported on Saturday that the USA plans to impose 10 percent tariffs on $200 billion of Chinese goods in the coming days and they will take effect within weeks.

The lack of unity within the United States administration on trade isn't new - Chinese and American officials have held a series of talks over the dispute, and reached at least one agreement which was subsequently abandoned by the president.

WASHINGTON-President Donald Trump has directed aides to proceed with tariffs on about another $200 billion of Chinese goods, despite Treasury Secretary Steven Mnuchin's attempts to restart trade talks with China, a source familiar with the matter said on September 14.

Its the latest move by the administration to punish china for not complying with fair trade practices. "We must strive for American ownership of American companies in China".

While US inflation has continued to rise steadily albeit modestly, firms across the country report lost businesses, layoffs and possible bankruptcies as input costs rise and exports fall. The key U.S. demand is that the Chinese government completely abandon its program of economic development and remain subservient to the United States in high-tech economic sectors.

China has tried without success to recruit Germany, France, South Korea and other governments as allies against Washington. This was made clear earlier this year when Washington designated China as a "strategic competitor", that is, a potential military enemy.

Alex Feinberg, Director of Partnerships at OKcoin, explains why the global trade war could hamper American innovation. The Trump administration has bypassed the WTO on its tariffs, however. We should be talking with them, not merely sitting back and observing. The move allowed U.S. steel producers to increase prices, raising costs for companies that buy steel and pressuring them to cut back elsewhere. Within the space of a generation, the weakening of the USA position was revealed in August 1971 when it scrapped the Bretton Woods monetary system declaring that the dollar would no longer be redeemable for gold.

Housing starts and existing home sales numbers are out in the US.

Economists warn the tariffs could chip away at U.S. economic growth. It is striving to reverse this situation. "China trade is now a presidential-level political issue".

Many US businesses are critical of the tariffs.

The mood in Beijing appears increasingly resigned to a new normal of tariffs for the short term, with discussions focused more on how to manage the Trump administration's policy, rather than how to make a deal.

The deal was not overturned because Iran had breached the agreement-international agencies found that it had fully complied.

China's 'counterattack strategy needs to restrict exports to the United States as well as (imports of) USA goods, ' Lou was paraphrased as saying.

"But it is a menacing reality insofar as it is a question of concentrating all the economic forces of the nation for the preparation of a new war", he wrote five years before the outbreak of World War II.

Isn't the USA also sparring with other trading partners?

Birmingham said the Australian government was "always concerned where people are not necessarily following the traditional rules-based order of worldwide trade". -Chinese trade conflict worsened.

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