China has many means to counteract United States tariffs

Thomas Peter-Pool  Getty Images Donald Trump with Chinese President Xi Jinping

Thomas Peter-Pool Getty Images Donald Trump with Chinese President Xi Jinping

China has not yet given a date for its previously announced retaliatory tariffs on $16 billion in US goods, which will target commodities such as crude oil, natural gas, coal and some refined oil products.

Analysts still expect a less favourable overall trade balance for China in coming months given it's early days in the tariff brawl.

Washington announced yesterday that from next August 23, 25% duties will be applied on products imported from China for a value of 16 billion dollars.

"ISRI is already hearing from contacts in China that the announcement has caused consternation among Chinese consumers of USA scrap commodities", said ISRI in a statement. This comes as the Trump administration imposed a 25-percent import tax in July, which effects Chinese components for TVs and video equipment.

China's quota system allows 34 imported movies a year to be shown in theatres, while overseas producers get a 25 percent share of box office takings, less than in other global markets.

The US-China trade war will reduce global output by 0.7% by 2020, while the Chinese economy is expected to shrink by 1.3% and the US 1%, according to a recent research note by Oxford Economics cited in a recent Bloomberg report.

The US trade war measures are set to escalate. Beijing has retaliated with higher duties on a similar amount of American goods.

The US action that prompted the Chinese retaliation was the latest by President Donald Trump to put pressure on China to negotiate trade concessions, after Washington imposed tariffs on US$34 billion in goods last month.

The U.S. Trade Representative's Office is looking into the possibility of a ten percent tariff on another $200 billion in Chinese goods.

"We expect export growth to cool in the coming months, though this will primarily reflect softer global growth rather than USA tariffs", Evans-Pritchard said in a report. Beijing says it is ready to retaliate against $60 billion of American imports.

These facilities will increase US LNG exports from about 13.5 million tonnes now to about 66 million tonnes.

"Import growth is likely to slow as domestic headwinds continue to weigh on economic activity".

While trade tensions are being ratcheting up, China's trade surplus with the USA stood at $28.1bn in July, close to the record-high in June, data released yesterday showed. In the meantime, its trade gap with the 28-nation European Union contracted 8 per cent to $11.2 billion.

However, the tariff on American condoms seems to be negligible at best for American companies. Items included on the list subject to a 25% retaliatory tariff include hog casings, sheep casings, gizzards, wheat and wine. Those nations have criticized Trump's tactics, but they share USA complaints about Chinese industrial policy and market barriers. So far, his tariffs target about one-tenth of all Chinese imports to the United States.

Beijing has stepped up efforts, so far without success, to recruit governments including Germany and France as allies.

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