U.S., China exchange another round of tariffs

The United States and China imposed yet another set of tariffs on each other, sending stock markets down and increasing global economic growth uncertainty.

The BBC had the news:

The US has imposed fresh tariffs on $112bn (£92bn) of Chinese imports such as shoes, nappies and food.

The new tariffs are a sharp escalation in the bruising trade war, and could cost households $800 a year.

The move is the first phase of US President Donald Trump’s latest plan to place 15% duties on $300bn of Chinese imports by the end of the year.

In response, Beijing began to introduce measures targeting $75bn worth of US goods.

The measures included a 5% tariff on US crude oil, the first time fuel has been hit in the trade battle between the world’s two largest economies.

What was initially a dispute over China’s allegedly unfair trade practices is increasingly seen as a geopolitical power struggle.

So far, Washington has imposed tariffs on hundreds of billions of dollars worth of Chinese goods to pressure Beijing into changing its policies on intellectual property, industrial subsidies, market access, and the forced transfers of technology to Chinese firms.

Beijing has consistently denied that it engages in unfair trade practices, and has retaliated with tariffs on a wide range of US products.

Reuters’ Ritvik Carvalho noted the effect of the move and CHina’s retaliatory tariffs on stock markets:

Global stocks dipped on Monday after the United States and China imposed new tariffs on each other’s goods, reinforcing investors’ worries over slowing global growth, with no clear end in sight for the trade war.
MSCI’s All-Country World Index, which tracks shares across 47 countries, was down 0.1% on the day.

European shares rose cautiously, driven by a rally in miners, although sentiment remained fragile in the light of the latest round of tit-for-tat tariffs kicked off between the U.S. and China.

Washington’s 15% tariffs on a variety of Chinese goods came into effect on Sunday, while China began to implement new duties on a $75 billion target list.

However, both sides will still meet for talks later this month, U.S. President Donald Trump said.

Trade-sensitive German shares .GDAXI were flat to slightly higher and the pan-European stocks benchmark index STOXX 600 was up 0.3% by 0754 GMT, beginning September higher after a 1.6% drop in August as the trade war, which has roiled financial markets and raised global recession fears, rages on for more than a year.

“Despite the market’s sanguine take, we believe the ultimate outlook for the trade dispute has become harder to predict with confidence,” said Mark Haefele, chief investment officer at UBS Global Wealth Management.

Bloomberg provided the view from Beijing:

China shrugged off U.S. President Donald Trump’s latest escalation of the tariff war, with state media signaling the government is ready to weather the economic turbulence as no progress to resolve the standoff is in sight.

Editorials and commentaries since the Trump administration slapped tariffs on roughly $110 billion in Chinese imports on Sunday have focused on the impact that the latest hikes on goods produced in China will have on U.S. consumers. Late Sunday, the State Council, or cabinet, released a statement pledging to increase economic support if needed.

Chinese officials have yet to give a clear sign that they intend to carry through a plan for in-person negotiations in Washington this month, a meeting that was planned before the latest round of tit-for-tat measures. Few column inches were dedicated to the trade war Monday, and there was little evidence of a change in stance.

“It is time the U.S. administration reconsidered its poorly thought out China-bashing moves,” an editorial in the China Daily argued. “Working to secure a trade deal would be a more fruitful approach.”