China trade war fears shaking up more than just Wall Street

The U.S. buys $506 billion worth of goods from China but only exports $130 billion, leaving a trade deficit of $375 billion between the two countries. China said today it was ready to pay "any cost" in a possible trade war with the USA, after President Donald Trump warned he was considering US$100 billion (RM387 billion) in extra tariffs.

"If the USA side disregards opposition from China and the worldwide community and insists on carrying out unilateralism and trade protectionism, the Chinese side will follow through, at any costs, till the end", the Ministry of Commerce said in a statement yesterday.

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. If China were to respond to the US's $100 billion worth of tariffs in kind, on the other hand, it would mean placing duties on nearly all American imports, which totalled $130 billion in 2017.

China responded with proposed tariffs on fresh fruit, pork and recycled aluminum, accounting for $3 billion of USA exports a year ago. That move was a direct reaction to the tariffs on $50 billion in Chinese goods that the White House detailed on Tuesday. This came after China said on Wednesday that it would impose 25 per cent tariffs on 106 United States products worth US$50 billion, ranging from soya beans to cars to aeroplanes. He said the government's aim is to avoid a trade war with China, though he acknowledged that the potential for such a conflict does exist. But given every single political economy decision we've made post-millennium explicitly denied the possibility of, and leveraged us to, any ultimate economic (or broader strategic) contest between the USA and China, it's all a bit of a dark joke to tell us to do it today.

The Dow Jones Industrial Average ended down almost 575 points, or 2.3 percent, at 23,932.76 after sinking more than three percent earlier. "We don't have a trade war, we've lost the trade war", Trump said in a radio interview with NY radio show, 77 WABC's "Bernie & Sid".

Dr. Martin Luther King Jr. honored 50 years after his death
Speakers and performers are scheduled all day at the motel, now the National Civil Rights Museum . Career criminal James Earl Ray was convicted of King's murder and died in prison in 1998.

Putin says Russia, Turkey agreed to speed up delivery of S-400s
Recep Tayyip Erdogan and Vladimir Putin have launched the construction of the Akkuyu nuclear power plant earlier in the day. Half of the offshore section of the pipeline has already been installed.

Apple releases iOS 11.3 update with new Animoji and Battery Health feature
The update, iOS 11.3, is technically one of a dozen official updates to the iOS 11 operating system since it debuted in September. In addition to the privacy icon, Apple will also start providing privacy management tools in compliance with the new GDPR ruling.

The International Monetary Fund also expressed concern, saying the proposed tariffs would likely damage the United States economy and those of other nations. Amid widespread concern and calls for restraint from U.S. businesses and farm states that are most vulnerable to Chinese retaliation, Trump said on Friday the outcome would be worth the short-term risk. A key reason is that in the absence of USA leadership, China faces less resistance in setting the global standards in trade and investment and technology development. Mizuho Securities believe that both "China and the USA will eventually scale back its list of reciprocal tariffs and we do not look for an all-out trade war between China and the U.S.".

While US officials said they were prepared to talk the issues through with China, there was no clear path to negotiations. Also at risk are foreign firms that produce in the U.S. Germany-based BMW sends 89,000 vehicles annually from the U.S.to China, the Associated Press reported, while Daimler AG's Mercedes-Benz ships 65,000. In a speech at the Economic Club of Chicago on Friday, Fed chair Jerome Powell said it was "too early to say" what the result of a trade war would be on the USA economic outlook. Both sides have been careful to leave time for further negotiations in an effort to prevent the tariffs from taking effect.

Trump's new round of tariffs would have similarly negative consequences for the US pharmaceutical industry, which makes heavy use of ingredients produced overseas.

"We are on a unsafe downward spiral and American families will be on the losing end", Shay added in a statement, urging Trump " to stop playing a game of chicken with the USA economy".

But if this spirals into a bigger conflict between the world's two biggest economies, it's worth keeping something in mind: In a trade war, the usual rules of commerce may not apply.


Popular
  • Prince Philip in 'Good Spirits' After Hip Replacement Surgery

    Prince Philip in 'Good Spirits' After Hip Replacement Surgery

    He has been largely blessed with good health, but he has been admitted to hospital with various complaints in recent years. Prince Philip has been in pain for over a month now and has been forced to cancel a number of rare public engagements.
    Marines feared dead in military chopper crash

    Marines feared dead in military chopper crash

    On Tuesday, a CH-53E Super Stallion crashed in El Centro, Calif., killing all four people on board. A Marine Corps helicopter crashed in Imperial County and the entire crew is presumed dead.
    Russia Mourns Victims of Deadly Mall Fire in Siberia

    Russia Mourns Victims of Deadly Mall Fire in Siberia

    Opposition leader Alexei Navalny called on people to attend a protest event later on Tuesday in Moscow . "We're talking about demography and losing so many people", Putin angrily told officials.
  • Interstitium Is Fluid-Filled Shock Absorber

    Interstitium Is Fluid-Filled Shock Absorber

    Before the pancreas and the bile duct were removed, patients underwent confocal microscopy for live tissue imaging. The researchers observed a net-like structure surrounding fluid-filled spaces around the bile duct.

    Tiangong-1 Space Station To Fall To Earth Within A Week

    The ASI is one of 13 worldwide space agencies monitoring the satellite as it approaches earth for an uncontrolled crash landing. The 9.4-ton Tiangong-1, which name translates as "Heavenly Palace-1", is the size of a school bus and was launched in 2011.
    Police Officers Who Fatally Shot Alton Sterling Won't Be Charged

    Police Officers Who Fatally Shot Alton Sterling Won't Be Charged

    Lake shocked Sterling with a stun gun before the officers wrestled him to the ground, according to federal investigators. One of Sterling's aunts, Sandra Sterling, said Salamoni took an oath to protect and serve, not "protect and kill".
  • Solo: A Star Wars Story To Debut At Cannes Film Festival

    Solo: A Star Wars Story To Debut At Cannes Film Festival

    Nonetheless, organizers have agreed to exhibit the new Ron Howard-directed Star Wars movie during a special screening on May 15. Solo stars Alden Ehrenreich as the titular Han Solo , hero of four of the previous eight films in the main Star Wars canon.
    FA Cup win would cap brilliant season for Spurs, says Harry Kane

    FA Cup win would cap brilliant season for Spurs, says Harry Kane

    Conte looks set to be the third coach of the Roman Abramovich era to lose his job a year after winning the Premier League. The Premier League champions have failed to match their acheivements of last season.
    Roma set record-breaking asking price for Arsenal and Liverpool target Alisson

    Roma set record-breaking asking price for Arsenal and Liverpool target Alisson

    Roma having "nothing to lose" in their Champions League quarter-final clash with Barcelona , says former victor Marco Materazzi. At the time of the transfer, Monchi had a hard time believing that Salah would prosper in the English Premier League .
  • Snapchat takes leaf from Facebook with group video, mentions

    Snapchat takes leaf from Facebook with group video, mentions

    To tag a friend, users insert the '@' sign, type out their friend's username and then tap on the name of the user you want to tag. Facebook Messenger has filters too, but only supports six callers; Houseparty can handle eight callers, but doesn't have filters.
    Three people injured in YouTube HQ shooting

    Three people injured in YouTube HQ shooting

    Stanford Hospital says it has received patients from a shooting at YouTube headquarters, according to the Associated Press . Video taken on Snapchat showed a massive police presence and people filing out of the building with their hands up.
    Sarah Jessica Parker Breaks Silence on Cynthia Nixon's NY Governor Bid

    Sarah Jessica Parker Breaks Silence on Cynthia Nixon's NY Governor Bid

    Her post came one day after Page Six speculated Parker may not support Nixon in the race. Nixon is challenging Governor Andrew Cuomo for the Democratic nomination.

CONNECT