Business

A Look at the Customs War between the United States and China – Current Trade War




  Revolving trade war
The US and China are making conciliatory moves ahead of trade talks, but they show no signs of progress towards ending a customs war that threatens global economic growth.

Beijing offers to limit trade surplus with the United States by purchasing more US exports. But Chinese leaders are resisting the pressure to roll back technology plans that their trading partners say violate Beijing's free trade obligations and hurt foreign competitors.

Prior to the 13th round of talks in Washington in early October, President Donald Trump postponed a planned tariff hike on Chinese goods. Beijing abolished punishment for soybeans in a move that helps both American farmers and Chinese pig breeders who need soy as a feed and is under financial pressure amid a devastating outbreak of African swine fever.

These movements helped to calm spicy financial markets. But economists say that while some temporary deals in the burgeoning battle for technology and commerce may be possible, they don't expect a final settlement this year.

AP

  Hope for a favorable outcome

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Hope for a favorable outcome

Trump has accused Beijing of pulling out talks in hopes that he will be defeated in his re-election next year and his successor may agree on more favorable terms.

Private sector analysts say it is unlikely. But they say Beijing may be hoping Trump will feel pressure to compromise to bolster his self-proclaimed status as a deal.

The tariffs Trump first imposed on Chinese imports last year largely saved American consumers by focusing on industrial goods. "Being tough on China is popular as long as it doesn't mean you pay more for things," said Nathan Sheets, chief economist at PGIM Fixed Income and former secretary of state for the Treasury for International Affairs. A Look at the Trade War and its Impact:

In Image – Front Cover Magazines with Chinese President Xi Jinping and U.S. President Donald Trump on trade war is being put up for sale in a book stand on the roadside in Hong Kong.

AP

  How it started
Trump beat 25% of US $ 50 billion of Chinese imports last year. Beijing retaliated with similar penalties.

In a spiral of increased action for the United States, the United States has elevated its duties or announced plans to do so on $ 550 billion Chinese goods, or almost everything Americans buy from China.

Beijing has raised fees of an estimated $ 120 billion US goods. China runs out of imports for retaliation due to the skewed trade balance.

AP

  What the dispute is about

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What the dispute is about

The Trump administration wants Beijing to roll back plans for government-led creation of global competitors in robotics and other technology fields. Europe, Japan and other trade partners have objected to Trump's tactics, which have also been used against them, but reiterates US complaints that Beijing plans are breaking its market opening commitments.

They say that China's industrial development is based on stealing or pushing companies to hand over technology and breaking trade agreements by subsidizing and shielding the new companies from competition. Chinese leaders are reluctant to give up development strategies they see as a path to prosperity and global influence.

Pictured – Shipping containers from China and other Asian countries are unloaded at the Port of Los Angeles as the trade war continues between China and the United States, in Long Beach, California.

AFP

  Why it matters
The war has struck American and Chinese farmers and factories and sent shockwaves through global industries. Chinese data show US trade fell 13.9% year-over-year for the first eight months of 2019. It has disrupted industrial supply chains across the world, depressing demand for processor chips and other industrial components from Japan, South Korea, Europe and other suppliers. Businesses and investors are concerned about global economic growth, which is already showing signs of cooling, may fall in recession.

One point of reference is how to enforce any agreement. China insists that Trump's tariff increase must be lifted as soon as an agreement comes into force. Washington says that at least some must be in place to guarantee that Beijing will fulfill its promises. Talks broke down in May on that matter, and there is no indication that any of the sites have offered concessions to break the stalemate.

In the photo, Chinese investors are monitoring stock prices in a Beijing brokerage house.

AP



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