Economy

The Guardian view on US China trade wars: don’t start them

The Guardian view on US China trade wars: don’t start them

Fox Business anchor Maria Bartiromo said on "America's Newsroom" Friday, "I don't think the USA has any choice but to get tough" as the Trump administration moved ahead with increased tariffs on $200 billion in Chinese goods.

The talks resumed Friday, Treasury Secretary Steve Mnuchin describing them has having been "constructive".

For instance, the US-China trade war was one of the key factors that triggered a massive sell-off in the fourth quarter of 2018. The diplomatic cable from China arrived in the USA on Friday with many edits to the 150-page draft trade agreement that would have eliminated all the trade progress the two countries made since past year.

He appealed to Washington to avoid more tariff hikes, saying they are "not a solution" and would "harm" the world.

A Chinese delegation led by the country's top trade negotiator, Vice Premier Liu He, arrived in Washington on Thursday for the latest round of discussions.

Washington is counting on the strong USA economy to be able to withstand the impact of higher costs from the import duties and retaliation better than China, which has seen its growth slow.

"The US side has given many labels recently: 'backtracking, ' 'betraying, ' etc".

Even some business owners wary of Trump's tariffs agree the president is on to something. USA officials accused China of going back on prior details of the deal; China denied this.

Hu Xijin, editor in chief of the Global Times newspaper, tweeted citing an "authoritative source" that the talks "didn't break down" and that the two sides agreed to meet again in Beijing at some unspecified date in the future.

Over the course of his presidency, President Trump has placed significant pressure on China to come to a fair trade agreement with the U.S. The question is - how did the trade war, which has been called "the most costly trade conflict" in economic history, get to this point?

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Trump responded in a Sunday tweet by threatening to raise existing tariffs to 25 percent and impose new ones on billions of dollars in Chines imported goods.

Despite such bluster, factories in Chinese coastal regions that serve the US market have been devastated.

Consumer products - including cell phones, computers, clothing and toys - are especially targeted by the tariff rate increase from 10% to 25%.

"What I'm doing now with China should've happened many years ago", said Trump.

The Trump administration raised duties from 10% to 25% on £155 billion of Chinese imports.

Trump has repeatedly slammed China for indulging in what he says are unfair trade practices, particularly with regards to access to its giant market, intellectual property and technology transfers. And he has renewed his threat to extend the tough tariffs to all products the U.S. imports from China.

Trump tweeted that if the US bought $15 billion in agriculture from farmers it would be far more than China buys now. James Lankford said the tariffs "will continue to harm American workers, American consumers, and American companies in the days ahead". The Shanghai Composite Index rose 3.1% and Hong Kong's Hang Seng Index closed up 0.8%.

The higher United States import taxes do not apply to Chinese goods shipped before Friday.

Consumers are also feeling some pain: The American Apparel and Footwear Association estimates that a 25% tariff on apparel imports will increase costs for a family of four by $500 a year.

The move "exacerbates the uncertainty in the global trading environment, further raises tensions between the USA and China, negatively affects global sentiment and adds to risk aversion globally", said Michael Taylor, managing director for credit strategy and standards at Moody's Investors Service in Hong Kong.