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Trump tariffs on $200 bn of products from China have negative impact and criticism

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  • Tue, 09/18/2018 - 23:27
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  • EFE

The American Chamber of Commerce in China Tuesday criticized in a statement the new tariffs worth $200 billion announced by Washington imposed on Chinese exports and added that they will harm businesses of the United States operating in China.

"While the aim is to put further pressure on the Chinese economy, this will also cause suffering for US companies in China, with nearly half of our members telling us earlier this month that this latest round of tariffs would have a 'strong negative impact' on their business," said AmCham China.

The statement signed by AmCham China Chairman, William Zarit, warned that China has promised to respond in the same way to US tariffs thereby continuing a spiral in which "no one will emerge victorious from this counter-productive cycle."

AmCham China warned that China can fight tariffs with other non-tariff measures and many business members of the chamber reported having faced new limitations in operating in the Asian country apart from higher tariffs.

Increased inspections or longer customs clearances are some of the reprisals that US firms have faced in China, warned AmCham, which predicted that the conflict might force companies to relocate operations back to the US.

It stated that "6 percent of our member companies say this current US-China trade dispute would make them consider relocating operations back home."

US President Donald Trump also warned that these taxes will be increased to 25 percent from Jan. 1 and said that "if China takes retaliatory action against our farmers or other industries, we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports."

The European Union Chamber of Commerce in China on Tuesday said the decision by the United States to impose a new round of tariffs worth $200 billion on Chinese imports is madness.

"We think that what the US is doing right now is economic madness. This is not going to help to deal with the problems that we have both identified," Mats Harborn, president of the EU chamber, said in a press conference in Beijing, adding that further engagement is needed to solve problems.

Harborn added that the EU chamber was also "very frustrated by all the lack of progress in reforms” in the Asian country but that "it is a mistake to say that nothing is happening" and that China has stopped reforming.

He also pointed out that the new wave of tariffs, which will come into effect on Sep. 24, must be viewed as "a negotiation tactic of Mr Trump, who believes that the way to negotiate is to put very high demands and then deny compromise.”

The president of the EU chamber explained that China could not be pressured to make substantial changes quickly and said that the US "has to have realistic expectations on what can be done in the short term."

"This is more easily said than done, but we think that China should show responsibility ... China should reiterate promises made by (President) Xi Jinping in Davos one and a half years ago" and China should open up, reform and modernize its regulatory environment, Harborn said. "It is very urgent that it comes up with a credible reform agenda timetable for the SOEs (state-owned enterprises)," he added.

The EU chamber official predicted that some companies may value the option of changing their operational headquarters to another country.

The measure will also affect the investment and expansion plans of companies, leading to negative sentiment and uncertainty, which will have a negative effect on financial markets, Harborn warned.


Trump went on to threaten additional tariffs if China makes any reprisals or retaliates in any way to the move, which had been expected after the close of the stock market on Monday as per remarks by the president earlier in the day.

The move constitutes a significant escalation of the trade war between the US and China, and the additional tariffs announced on Monday come after the Trumpadministration in June imposed tariffs on some $50 billion worth of Chinese goods, to which China responded in like measure.

All told, with the new tariffs, about half of the products that China sells to the US - the world's two biggest economies - will be affected by significantly higher duties.

"China has had many opportunities to fully address our concerns," said Trump in the White House statement on Monday evening. "Once again, I urge China's leaders to take swift action to end their country's unfair trade practices."

Earlier on Monday, Trump had said at the White House - discussing the yet-to-be-imposed tariffs - that "It will be a lot of money coming into the coffers of the United States of America."

"They want to make a deal," Trump said. "But from our standpoint, it has to be fair. It has to take care of our workers."

Trump calculates Washington's annual trade deficit with Beijing to be some $376 billion, a figure he calls unacceptable and which needs to be brought into greater balance.

In July, the administration had published a list of more than 200 product areas that would be affected by the new round of tariffs implemented on Monday, including nuclear reactors, traffic signals and train components.

However, since the list was published, more than 300 products have been deleted including smartwatches and many other products manufactured and sold by Apple Inc., as well as health and safety devices and children's playpens.

Trump, meanwhile, has suggested that - if a fair deal cannot be worked out - he might impose a third round of tariffs on an additional $267 billion of Chinese goods.

Source.EFE

 

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