China plans to resume 25% tariffs on USA vehicle imports

Marco Green
August 25, 2019

The duties have slashed exports of USA crops and prompted the Trump administration to compensate American farmers for losses over two years with as much as US$28-billion.

He says when China imposed tariffs previous year, US vehicle exports to the country were cut in half. "What's interesting to note here is that the market was not expecting this tariff retaliation given that China did not immediately react to the 10% U.S. tariffs on $ 300 billion goods and President Trump's unexpected tariff delays to 15 December".

In addition to the auto tariffs on cars imported from the US, China also plans to impose even greater tariffs on soybeans and crude oil.

Iris Pang, Economist at ING, points out that China has eventually retaliated with tariffs but this retaliation is far from the last.

"We hope the United States will meet China halfway", the spokesman said referring to a trade agreement that can end the protracted trade row.

Though Chinese and U.S. trade negotiators held another discussion earlier in August, neither side appears ready to make a significant compromise and there have been no sign of a near-term truce.

While the President obviously doesn't have the authority to do that, he announced increased tariffs on Chinese goods late this afternoon.

China snapped up a small volume of U.S. soybeans last week after pledging to halt purchases of American farm products due to the escalating trade war between Washington and Beijing, U.S. Department of Agriculture data showed on Thursday.

"All eyes will now turn to the US Fed to see whether Jerome Powell, the Fed Chairman, will react to these developments by accelerating rate cuts". Some tariffs will come into effect on 1 September while others will kick in around 15 December.

On Friday, China said it would impose punitive tariffs which will range from 5 per cent to 10 per cent on 5,078 items from the US. Carmakers such as Daimler and Tesla had adjusted their prices in China when the auto and auto parts tariffs had been suspended. The company added, "It is essential for these two important economies to work together to advance balanced and fair trade".

Other reports by Click Lancashire

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