On August 23rd, China and the US announced that the trade war was about to get escalated, once again.
First, China announced that it would raise tariffs on $75 billion of US imports from 5% to 10%, in a first batch, with other products being slapped with 25% tariffs in a second batch, at a later point.
The first batch would come into effect from September 1st and the second from December 15th.
The duties – announced and then suspended earlier this year – were in response to Washington’s plan to impose 10% tariff on US$300 billion worth of Chinese imports.
The dates are the same as a August 15th announcement that the US would impose additional tariffs of 10% on Chinese goods worth about $300 billion, effective on September 1st and December 15th, respectively, in two batches.
According to the State Council’s Customs Tariff Commission, the added duties will apply to goods including include soybeans, beef, pork and crude oil.
Tariffs on American vehicles and car parts would take effect from December 15th, and they would be 25% up from the current 5%.
Our Country has lost, stupidly, Trillions of Dollars with China over many years. They have stolen our Intellectual Property at a rate of Hundreds of Billions of Dollars a year, & they want to continue. I won’t let that happen! We don’t need China and, frankly, would be far….
— Donald J. Trump (@realDonaldTrump) August 23, 2019
White House trade adviser Peter Navarro said China’s reaction was “well anticipated” but would only “strengthen the resolve of this president”.
“And they signal once again to the American public that China wants to buckle our knee so that they can keep having their way with us,” Navarro said.
China’s tariff commission said Beijing decided to reimpose the tariffs because Washington’s planned increases “violated the consensus reached by the two heads of state in Argentina and the consensus reached in Osaka” in relation to the meeting between US President Donald Trump and Chinese President Xi Jinping in June at the G20 Summit in Japan.
“China’s adoption of punitive tariff measures has been forced by the pressure of US unilateralism and trade protectionism,” the commission said.
“The US measures have led to the continuous escalation of China-US economic and trade frictions, which have greatly harmed the interests of China, the US and other countries, and have also seriously threatened the multilateral trading system and the principle of free trade,” it further said.
In conclusion on the Chinese side, the commission said that it hoped the US would follow through on the arrangements from Argentina and Osaka.
“China hopes the United States will continue to follow the consensuses reached by the two heads of state in Argentina and Osaka, return to the right track of settling disputes through negotiations, work with China and make concrete efforts toward the goal of terminating the economic and trade frictions.”
In response, US President Donald Trump, also on August 23rd, said he would increase tariffs on Chinese imports, while at the G7 Summit in Biarritz, France.
He said he would raise existing duties on $250 billion in Chinese products to 30% from 25% as of October 1st. Additionally, he said, tariffs on another $300 billion of Chinese goods, which start to take effect on September 1st, would be 15% instead of 10%.
He said he could announce a national emergency over the trade war if he so wished.
“I could declare a national emergency, I think when they steal and take out and intellectual property theft anywhere from $300 billion to $500 billion a year and when we have a total lost of almost a trillion dollars a year for many years,” Trump said. He further said he had no intention of calling an emergency as of the moment of speaking.
US Treasury Secretary Steven Mnuchin reinforced Trump’s call, accusing Beijing of unfair trade practices.
“We do not have free trade with them,” Mnuchin said at the sidelines of the G7 Summit.
“It’s a one-way street: They have free entrance into our markets, our investments, our companies and we do not have the same thing there. That’s the only reason why we are in this situation with China. If China would agree to a fair and balanced relationship, we would sign that deal in a second,” he added.
Three days later, on August 26th, still at the G7 Summit, Trump praised Chinese President Xi Jinping and his “desire for a deal.”
“China called last night our top trade people and said ‘let’s get back to the table’ so we will be getting back to the table and I think they want to do something. They have been hurt very badly but they understand this is the right thing to do and I have great respect for it. This is a very positive development for the world,” Trump said.
“They’ve been hurt very badly but they understand this is the right thing to do,” he said.
“I think we are going to have a deal,” he added. “They have supply chains that are unbelievably intricate and people are all leaving and they are going to other countries, including the United States by the way, we are going to get a lot of them too.”
Finally, in the early hours of August 26th, prior to praising China for their desire to strike a deal, Trump took to Twitter, claiming that MSM was spreading fake information regarding everything that was going on at the G7, specifically related to China tariffs, among other things.
In France we are all laughing at how knowingly inaccurate the U.S. reporting of events and conversations at the G-7 is. These Leaders, and many others, are getting a major case study of Fake News at it’s finest! They’ve got it all wrong, from Iran, to China Tariffs, to Boris!
— Donald J. Trump (@realDonaldTrump) August 25, 2019
MORE ON THE TOPIC:
- Trade Deficit Widens & 3 More Data Points Proving The U.S. Is Losing The Trade War
- After Promising First Half Of July, US-China Trade War Ramps Up In New Escalation