America v China: why the trade war won’t end soon | The Economist
The escalation of the trade war with China will affect almost 5% of the world commodity coverage, they took a share with world trade ones, in turn, while promises to answer new American duties, the Chinese state media call for an aggressive “counterattack”. However, as already reported “Findfairfaxandloudounhomes.com”, the possibility of a symmetric reaction of the PRC on the US trade restrictions is limited to an imbalance in mutual trade: Deliveries from the PRC in the United States significantly exceed the consignment flows in the opposite direction, and the last de facto is completely falling under the tightening of trading policies PRC. So, in August, Beijing was able to find only $ 60 billion imports from the United States for new restrictions, responding to the threat of introduced by Washington of increased tariffs for products worth $ 200 billion. However, to clarify the possible reaction of Beijing there is still a week – before the actual introduction of American trade restrictions.
Why not see the end of the trade war between the US and China
China is considering sending a delegation to Washington for new negotiations in the light of US decision, today the South China Morning Post newspaper reported today with reference to a high-ranking official in Beijing, pointing out the risk of a long trade conflict of the two largest economies of the world, which can hit global growth. Fan Synehai, Vice-Chairman of the Chinese Regulator of the Securities Market, said that it hopes that the parties will be able to sit down and talk, but new US measures “poisoned” atmosphere. In turn, the American authorities trade positions do not intend to soften. “We very clearly declared those changes that should be made, and we gave China all the opportunities to handle us right, but so far China does not want to change your approach,” said Donald Trump.
Additional duties on goods worth $ 267 billion, which President of the United States spoke on Monday, will affect the entire Chinese import to this country.
Recall that the conflict between the two largest economies of the world began on June 15, when Donald Trump announced that in connection with the “theft” by China’s American intellectual property and technologies, as well as the “unfair trade practice” of the US PRC will introduce duties in the amount of 25% for imported from this Countries Cost $ 50 billion. Such plans were implemented in two stages – July 6 and 23, at each of which increased customs rates began to act with respect to the wide list of trade nomenclature from the PRC in the amount of $ 34 billion and $ 16 billion, respectively. US introduced a fee of 25% on imports of 818 items of goods from China total supply of $ 34 billion per year. As a countermeasure, China on the same day introduced a fee of 25% for the import of the equivalent volume of American goods. In August, the United States introduced a fee of 25% of the import of Chinese goods by $ 16 billion, immediately after that the Chinese side introduced similar measures.
Analysts say that the introduction of regular US duties regarding goods from China is global economic risks, as they will already be touched upon 2.5% of the global trade volume. With the continuation of the escalation, this share will also grow up to 4%, refers to the review of the Dutch Bank Ing. There are also noted that since the Chinese authorities intend to take response against the United States, the parties are unlikely to be achieved in the near future, and the contradictions between the two countries can even increase in 2019. “We expect the United States additional duties for the remaining share of imports from China ($ 267 billion), and China will introduce retaliatory measures,” the bank’s experts indicated.
China threatened the fees on American LNG
The United States and China are the two largest economies of the world, as well as the largest oil consumers, and industry experts fear that the repellent contradictions of both countries can hit the demand for raw materials in them. Further reduction, oil quotes hold expectations from the market of Iranian barrels in connection with US sanctions against Tehran, analysts consider. Oil prices are declining this morning because of the exacerbation of the US and China’s shopping conflict, threatening to hit raw demand.
Meanwhile, the dollar decreased to a minimum of almost two months on the background. Euro added 0.3%, to $ 1,1716, after lifting 0.5% on the eve. The pound sterling rose by 0.05%, to $ 1.3167, also after the previous growth on Monday by 0.7% (up to $ 1.3165) against the background of progress reports in resolving the issue with the border between Ireland and Northern Ireland after “Brexit”. The ruble exchange rate today confidently grows against the dollar and the euro, ignoring the risks of trade wars between the United States and China. Ignoring the ruble of the escalation of the US Trade Conflict of the United States and China in view of the fact that the whole threat from the trade confrontation has already been almost fully incorporated into the market and won, Deputy Chairman of the Board of Loco-Bank Andrei Lushin believes. On the side of the ruble, there are relatively stable oil and the tax period in the Russian Federation: by the end of the month, large exporters will convert monetary revenue to pay mandatory payments. Suspending the currency purchases by the Bank of Russia by the end of this year also forms more relaxed conditions for trading.