U.S. trading partners, businesses predict tariffs will backfire

U.S. trading partners, businesses predict tariffs will backfire

-China trade relations should not be a zero-sum game, China said on Wednesday, as U.S. President Donald Trump seeks to impose tariffs on up to $60 billion of Chinese imports.

President Trump has argued that the tariffs are to protect USA jobs.

The EU says that rather than impose tariffs on friendly nations, the US should cooperate in trying to reduce a glut of steel and aluminum on global markets, which experts says is largely due to China's overproduction in recent years.

While the tariffs would be chiefly targeted at information technology, consumer electronics, and telecoms, they could be much broader, and the list could eventually run to 100 products, this person said.

USA automakers are among the businesses with the most at stake, accounting for 38 percent of the aluminum and 15 percent of the steel consumed in the country, according to Ward's Automotive Reports.

"Trump isn't just threatening trade tariffs, he wants to tear up the entire worldwide order". Standing with Trump are workers, left, Vice President Mike Pence, Treasury Secretary Steven Mnuchin and Commerce Secretary Wilbur Ross.

"China urges the USA to respect the authority of the multilateral trade system, and repeal the measures as soon as possible", a China Ministry of Commerce statement recommended.

The tariffs will affect a wide range of products, including high-tech gadgets, food, furniture and beverages.

According to the report, one goal of the tariffs is to, "punish China for its investment policies that effectively force US companies to give up their technology secrets in exchange for being allowed to operate in the country".

"The last thing both sides of Atlantic need now is protectionism or escalation of Tariff increase".


"A tariff is a tax, plain and simple", said Matthew Shay, president and CEO of the NRF.

From the European, and especially the German standpoint, the better approach would be to make a virtue out of necessity: The EU could, for example, offer to reduce tariffs on American-made cars, which are at 10 percent, while EU cars on the United States market are only charged from 2.5 percent to zero.

Housing trade groups also took a dim view of the tariffs, saying the policy would raise costs and slow building at a time when the nation faces a severe shortage in homes and rental housing. Moreover, it would prohibit China from "dumping" excess steel onto other countries. He wants to make access to US markets contingent on foreigners' playing by the rules (e.g., paying full price for the research costs of our technologies).

"If this is serious, the Chinese will retaliate. So let us cherish this relationship, not challenge it". But worldwide trade policy has nearly always been grounded in politics rather than economics.

He told the Daily News that the European Union "should not be hasty" and try to negotiate a deal to address USA concerns about national security, which is the stated reason why Trump says he is allowed to place the tariffs.

If, as expected, big action against China is announced, China will nearly certainly take equally strong retaliatory action. As reported by CNBC, Trump vetoed proposals of tariffs on $30 billion of Chinese imports, claiming that more aggressive tariffs are necessary.

While that is not a lot for the economy as a whole, it would be painful for the individual industry. The latter is slated to grow this year by 3.9 per cent, according to the International Monetary Fund's forecast in January.

The United States buys more steel from overseas than any other country - some 26.9 million tons in 2017.

The impact will be felt in the auto industry and businesses heavily reliant on steel - from the likes of Deere & Co.to oil drilling.

The tariffs could revitalize some US steel producers and aluminum smelters, but at the expense of USA companies in steel- and aluminum-related manufacturing, including those in the Cedar Valley.

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