'China fuels trade war fears with new tariffs on US goods - as it happened' diff viewer (7/8)

This article is from the source 'guardian' and was first published or seen on April 04, 2018 14:00 (UTC). It last changed over 40 days ago and won't be checked again for changes.

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China fuels trade war fears with new tariffs on US goods - business live	China fuels trade war fears with new tariffs on US goods - business live
2018-04-04 18:50:09 UTC	2018-04-04 20:50:23 UTC (about 2 hours later)
	In a surprise twist, shares have surged back in New York.
	The Dow has closed up 230 points, bouncing back from its early slump.
	Stocks make huge comeback, Dow rallies more than 700 points from lows of the day https://t.co/JtRnC7z2P9 pic.twitter.com/Lcv5w5TYbd
	Why? Well, markets are mysterious and sometimes random things, but Larry Kudlow can take some credit after his efforts telling investors not to panic.
	Trump can thank @larry_kudlow for calming the markets. Dow: +232 (+1%)S&P 500 +1.2%Nasdaq +1.45%A real turnaround after Kudlow went on air to say: "There’s no trade war here. What you’ve got is the early stages of a process....There’s already back channel talks going on. "
Paul Krugman, the Nobel-prize wining economist (and trade expert) has written an article for the New York Times, outlining why a trade war would be highly disruptive.	Paul Krugman, the Nobel-prize wining economist (and trade expert) has written an article for the New York Times, outlining why a trade war would be highly disruptive.
Here’s a flavour:	Here’s a flavour:
Since about 1990 corporate America has bet heavily on hyperglobalization – on the continuance of an open-market regime that has encouraged complex value chains that sprawl across borders. The notebook on which I’m writing this was designed in California, but probably assembled in China, with many of the components coming from South Korea and Japan. Apple could produce it entirely in North America, and probably would in the face of 30 percent tariffs. But the factories it would take to do that don’t (yet) exist.	Since about 1990 corporate America has bet heavily on hyperglobalization – on the continuance of an open-market regime that has encouraged complex value chains that sprawl across borders. The notebook on which I’m writing this was designed in California, but probably assembled in China, with many of the components coming from South Korea and Japan. Apple could produce it entirely in North America, and probably would in the face of 30 percent tariffs. But the factories it would take to do that don’t (yet) exist.
Meanwhile, the factories that do exist were built to serve globalized production – and many of them would be marginalized, maybe even made worthless, by tariffs that broke up those global value chains. That is, they would become stranded assets. Call it the anti-China shock.	Meanwhile, the factories that do exist were built to serve globalized production – and many of them would be marginalized, maybe even made worthless, by tariffs that broke up those global value chains. That is, they would become stranded assets. Call it the anti-China shock.
Of course, it wouldn’t just be factories left stranded by a trade war. A lot of people would be stranded too. The point of the famous “China shock” paper by Autor et al wasn’t that rapid trade growth made America as a whole poorer, it was that rapid changes in the location of production displaced a significant number of workers, creating personal hardship and hurting their communities. The irony is that an anti-China shock would do exactly the same thing. And I, at least, care more about the impact on workers than the impact on capital.	Of course, it wouldn’t just be factories left stranded by a trade war. A lot of people would be stranded too. The point of the famous “China shock” paper by Autor et al wasn’t that rapid trade growth made America as a whole poorer, it was that rapid changes in the location of production displaced a significant number of workers, creating personal hardship and hurting their communities. The irony is that an anti-China shock would do exactly the same thing. And I, at least, care more about the impact on workers than the impact on capital.
Some thoughts on trade wars and the stock market that doesn't like them https://t.co/4PoalWlx7a	Some thoughts on trade wars and the stock market that doesn't like them https://t.co/4PoalWlx7a
Analysts at Capital Economics have warned that President Donald Trump could raise the stakes further, possibly by labelling China a currency manipulator later this month.	Analysts at Capital Economics have warned that President Donald Trump could raise the stakes further, possibly by labelling China a currency manipulator later this month.
In a note to clients, they say:	In a note to clients, they say:
The next flashpoint may be the US Treasury’s semi-annual currency report, due out this month. As a candidate, Trump promised to label China a currency manipulator “on day one” but so far has resisted. In and of itself, that would not trigger any action, but it would be a signal that the trade spat is escalating.	The next flashpoint may be the US Treasury’s semi-annual currency report, due out this month. As a candidate, Trump promised to label China a currency manipulator “on day one” but so far has resisted. In and of itself, that would not trigger any action, but it would be a signal that the trade spat is escalating.
Here’s our latest news story on the US/China trade spat, for anyone just tuning in:	Here’s our latest news story on the US/China trade spat, for anyone just tuning in:
China has raised the stakes in the escalating trade showdown with the United States by unveiling tariffs on a wide-ranging list of American imports in response to levies on Chinese goods put forward by Donald Trump.	China has raised the stakes in the escalating trade showdown with the United States by unveiling tariffs on a wide-ranging list of American imports in response to levies on Chinese goods put forward by Donald Trump.
Beijing will impose additional tariffs of 25% on 106 American products from 14 separate categories, including soybean, cars and chemical products, covering imports to China worth up to $50bn (£36bn), Chinese state news agencies said on Wednesday.	Beijing will impose additional tariffs of 25% on 106 American products from 14 separate categories, including soybean, cars and chemical products, covering imports to China worth up to $50bn (£36bn), Chinese state news agencies said on Wednesday.
The measures come after the US announced details of new 25% tariffs on $50bn worth of imports from China drawn up by the Trump administration. The list of more than 1,300 products targets China’s industrial base, covering everything from industrial robots and electronics to metal alloys and aircraft parts.	The measures come after the US announced details of new 25% tariffs on $50bn worth of imports from China drawn up by the Trump administration. The list of more than 1,300 products targets China’s industrial base, covering everything from industrial robots and electronics to metal alloys and aircraft parts.
Washington said the levies were in response to China’s “unfair trade practices related to the forced transfer of US technology and intellectual property,” adding that the list of products had been designed to target China’s industrial plans while minimising the impact on the US economy.	Washington said the levies were in response to China’s “unfair trade practices related to the forced transfer of US technology and intellectual property,” adding that the list of products had been designed to target China’s industrial plans while minimising the impact on the US economy.
The array of Chinese products that would be affected is lengthy and varied, covering everything from aircraft jets and tyres, to uranium and nuclear reactor parts, poultry incubators, haymaking machines and guns and ammunition. Technology products are also hit, including TV cameras, jukeboxes and cassette players.	The array of Chinese products that would be affected is lengthy and varied, covering everything from aircraft jets and tyres, to uranium and nuclear reactor parts, poultry incubators, haymaking machines and guns and ammunition. Technology products are also hit, including TV cameras, jukeboxes and cassette players.
The proposed list will undergo a public review process before trade officials ultimately decide which products should be hit by tariffs.	The proposed list will undergo a public review process before trade officials ultimately decide which products should be hit by tariffs.
The Chinese state news agency Xinhua said the country would only implement its tariffs on American goods once the US government imposed levies on imports from China. Some types of aircraft, lubricants, tobacco and orange juice are on the list of products targeted by Beijing, along with some trucks and SUVs.	The Chinese state news agency Xinhua said the country would only implement its tariffs on American goods once the US government imposed levies on imports from China. Some types of aircraft, lubricants, tobacco and orange juice are on the list of products targeted by Beijing, along with some trucks and SUVs.
The inclusion of agricultural and food and drink products such as soybeans, whisky, beef, corn and wheat is likely to raise eyebrows for targeting southern American states where Trump drew much of his support while running for the presidency.	The inclusion of agricultural and food and drink products such as soybeans, whisky, beef, corn and wheat is likely to raise eyebrows for targeting southern American states where Trump drew much of his support while running for the presidency.
We’ve also pulled together a full list of the products which could be landed with new tariffs:	We’ve also pulled together a full list of the products which could be landed with new tariffs:
Wall Street is looking calmer now, but I’ll be back with any major developments....	Wall Street is looking calmer now, but I’ll be back with any major developments....
Other countries could benefit if China hits US exporters with new tariffs.	Other countries could benefit if China hits US exporters with new tariffs.
As Dutch financial group bank Rabobank puts it:	As Dutch financial group bank Rabobank puts it:
There aren’t enough soybeans in the world to meet China’s demands without US supplies.	There aren’t enough soybeans in the world to meet China’s demands without US supplies.
They suspect that farmers in Australia and Brazil might benefit, at the expense of US farmers, if American agricultural products become uncompetitively priced in China.	They suspect that farmers in Australia and Brazil might benefit, at the expense of US farmers, if American agricultural products become uncompetitively priced in China.
European stock markets have closed for the night, with trade jitters weighing on shares.	European stock markets have closed for the night, with trade jitters weighing on shares.
The Stoxx 600 index, which tracks the biggest companies across Europe, has lost 0.5% today, with losses in Germany, France, Italy and Spain.	The Stoxx 600 index, which tracks the biggest companies across Europe, has lost 0.5% today, with losses in Germany, France, Italy and Spain.
Britain’s market did a little better, though, with the FTSE 100 finishing 3 points higher (up a meagre 0.05%).	Britain’s market did a little better, though, with the FTSE 100 finishing 3 points higher (up a meagre 0.05%).
Here’s a transcript of Larry Kudlow, the US National Economic Council Director, telling Fox Business why a trade war won’t break out between the US and China.	Here’s a transcript of Larry Kudlow, the US National Economic Council Director, telling Fox Business why a trade war won’t break out between the US and China.
“Absolutely not. Absolutely not. And let me just say right at the top, number one, blame China, not President Trump. Because they’ve been going on for many years.	“Absolutely not. Absolutely not. And let me just say right at the top, number one, blame China, not President Trump. Because they’ve been going on for many years.
Trump is really the first president to fight back and to put a shot across the bow, stealing intellectual property rights, technology transfers, high barriers, investment limitations, high tariffs – this stuff really is not just unfair, it’s unlawful. It’s outside the boundaries of the WTO. Every country in the world knows this.	Trump is really the first president to fight back and to put a shot across the bow, stealing intellectual property rights, technology transfers, high barriers, investment limitations, high tariffs – this stuff really is not just unfair, it’s unlawful. It’s outside the boundaries of the WTO. Every country in the world knows this.
Every analyst knows this is the case. Somebody’s got to deal with it. President Trump is going to deal with it. There’s no trade war here. What you’ve got is the early stages of a process which will include tariffs, comments on the tariffs, then ultimate decisions and negotiations. There’s already backchannel talks going on. So look, I understand the stock market’s anxiety. I get that. But on the other hand, don’t over react. We’ll see how this works out.	Every analyst knows this is the case. Somebody’s got to deal with it. President Trump is going to deal with it. There’s no trade war here. What you’ve got is the early stages of a process which will include tariffs, comments on the tariffs, then ultimate decisions and negotiations. There’s already backchannel talks going on. So look, I understand the stock market’s anxiety. I get that. But on the other hand, don’t over react. We’ll see how this works out.
My view Stu, look, you know I’m a growth guy, I’m a Reagan supply side growth guy. I think that at the end of this whole process, that at the end of the rainbow, there’s a pot of gold. And if you open up that pot, you will see better economic growth, more trading going on, improved wages for both sides.	My view Stu, look, you know I’m a growth guy, I’m a Reagan supply side growth guy. I think that at the end of this whole process, that at the end of the rainbow, there’s a pot of gold. And if you open up that pot, you will see better economic growth, more trading going on, improved wages for both sides.
Anytime you lower barriers, anytime you lower barriers, and that’s the key, the president will say this, lower barriers is the key, don’t raise the barriers. Anytime you do that, it’s good for growth. It’s good for American growth and American workers, it’s good for China’s growth, it’s good for the rest of the world’s growth.”	Anytime you lower barriers, anytime you lower barriers, and that’s the key, the president will say this, lower barriers is the key, don’t raise the barriers. Anytime you do that, it’s good for growth. It’s good for American growth and American workers, it’s good for China’s growth, it’s good for the rest of the world’s growth.”