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Brazilian Agribusiness Assesses Gains from Trade War between U.S. and China

April 08, 2018 22:33·
Chinese President Xi Jinping begins a landmark visit to fellow export powerhouse Germany Friday the third leg of his Europea

Chinese President Xi Jinping begins a landmark visit to fellow export powerhouse Germany Friday the third leg of his Europea

"(But) we want them to stop participating in unfair and illegal trade practices and intellectual property theft, being a huge detriment to U.S. companies and businesses", she said.

At the same time, Mnuchin warned, "There is the potential of a trade war".

Seeking to tamp down alarm, he told reporters outside the White House: "So nothing's happened". Later, we discuss why there may be a method to this taxing madness. In response, the American president has asked the Office of United States Trade Representative to examine imposing a further $100bn in tariffs on other Chinese products.

The further tariffs were being considered "in light of China's unfair retaliation" against earlier United States trade actions, which included a proposed $50 billion of tariffs on Chinese goods, Mr Trump said in a White House statement.

"It mathematically means that China can't match the USA dollar for dollar", said Brad Setser, a senior fellow at the Council on Foreign Relations.

Financial markets declined on the escalating conflict. That's after US tariffs were already imposed on Chinese steel and aluminum earlier this year.

On a NY radio show, the president said short-term economic pain would be worth it. "So we might lose a little of it but we're going to have a much stronger country when we're finished, and that's what I'm all about".

In a trade war, US consumers would probably see higher prices on TVs, shoes and other "made in China" items at stores, the stock market would continue to sink, and businesses might decide that they don't want to make as many new investments after all, because they don't know what the tariff situation is likely to be in the coming months.

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China responded with proposed tariffs on fresh fruit, pork and recycled aluminum, accounting for $3 billion of United States exports past year.

Kudlow, a new hire to the president's economic team and a committed free-trader, said Trump is in regular contact with his Chinese counterpart Xi Jinping.

He also said no negotiations were likely in the current circumstances.

"We know that there could be some fluctuation, but at the same time the president has said enough is enough", said Press Secretary Sarah Sanders.

Hours later, China fired back with an equal amount of tariffs on US cars, planes and soybeans. Negotiations are underway, and there is room for both sides to back down and avert a worst-case trade war scenario.

Officials from both countries say they'll allow two months for debate and discussion before implementing any tariffs.

In the United States, Mark Zandi, chief economist of Moody's Analytics, said the dispute could wipe out half the economic benefits of the tax cut Trump signed into law with great fanfare in December. There's also no timeline for identifying which products will be subject to the second round demanded by Trump, an administration official said Friday. The problem of how to manage the rising power of China and its challenge to the superiority of the United States has been evident for two decades (I remember discussing it frequently with colleagues in the late 1990s). Trump made trade a central plank of his presidential campaign in 2016 and faces tough mid-term congressional elections in just seven months. People don't trade unless they expect to be better off, and the way to persuade someone to trade with you is to offer them something in return that they prefer to what they are giving up.

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