Archives of “Tariff” tag

rss

China confirms 80% tariff on Australian barley

  
  Analysis
#  #  #  #  #  #  #

The news that China was to impose an import tariff on Australian barley broke back on May 10

The tariff imposition has been announced in a statement from China’s Ministry of Commerce
  • anti-dumping tariff would be 73.6 per cent
  • while the anti-subsidy tariff would be 6.9 per cent
  • will remain in place for five years
This from China is in retaliation for Australia leading calls for an investigation into the origin and spread of COVID-19. China also halted imports of Australian beef last week as part of their response.
 The news that China was to impose an import tariff on Australian barley broke back on May 10 

US Treas Sec Mnuchin says tariffs on China to remain in place until phase 2

  
  Analysis
#  #  #  #  #  #  #  #

US Treasury Secretary Mnuchin

  • says tariffs will stay in place until there’s a phase 2 of china trade agreement
  • says Trump may consider removing tariffs under phase 2
  • says China has made strong commitments it will not manipulate currency

US Treasury Secretary Mnuchin 

Near-deal from May now being used as benchmark on how much tariffs to be rolled back – report

  
  Analysis
#  #  #  #  #  #  #

US contemplates removing more tariffs than anticipated

China and the US are discussing linking the size of tariff rollbacks to the preliminary terms set in the deal that failed in May, according to Bloomberg who cites two people familiar.
The White House is still debating the precise percentage internally but the report says a deal would at least include removing the Sept tariffs and eliminating the planned Dec tariffs.
China has demanded that all tariffs imposed after May be removed immediately and those from beforehand be lifted gradually.
The report says that some of the $250B in tariffs imposed in 2018 are under consideration to be rolled back and that opposition to the move has softened. Overall, the White House is looking at the tariffs holistically and debating on whether to remove somewhere between 35% and 60%. Those percentages fall inline with what percentage of the overall deal Phase One accomplishes.
For reference, the US currently has tariffs on $360B in goods. That number was $250B before the May talks fell apart. On May 10, the US also raised the tariff rate on those $250B in goods to 25% from 10%.

Overall this report reflects a generally positive take and shows that both sides are working on a deal and perhaps closer than anticipated. This is the first indication they’re working off the May text but it’s also a hint that the US may remove more tariffs than anticipated. It would be a great signal for markets if anything from May or earlier was lowered.

US imposes new China tariffs, raising levies to pre-WWII level

  
  Analysis
#  #  #  #  #  #  #  #  #  #  #

The U.S. slapped fresh tariffs on Chinese goods on Sunday to bring the average to more than 20%, comparable with levels seen during the protectionist era preceding World War II.

At 12:01 a.m. EDT, the U.S. imposed additional tariffs of 15% on about $110 billion in imports from China, covering 3,243 items. Consumer goods account for about half — far more than the 20%-plus of the previous round last September, which included such products as furniture. China’s corresponding tariffs against U.S. products took effect at the same time.

U.S. President Donald Trump postponed tariffs on 555 items on the original list — including smartphones — until Dec. 15 to soften the impact on the year-end shopping season. More than 80% of American imports of these goods come from China, and finding alternative sources is difficult. Higher tariffs are likely to lead to price increases, which risk weighing on consumer spending and thus the broader economy.

Digital consumer devices such as smartwatches are among the largest import categories by value affected by Sunday’s tariffs. More than half of all apparel is taxed as well.

China is retaliating with additional duties of 5% to 10% on $75 billion in imports from the U.S. The first tranche covers 1,717 goods including soybeans and crude oil, while the second set being implemented Dec. 15 will cover 3,361 items including autos.

But all told, fewer than 1,800 of these items — only about 35%, including crude oil — are new additions. Most have already been hit by previous rounds of tit-for-tat tariffs.

Beijing has already imposed tariffs on about 70% of its imports from the U.S. by value, and after these rounds, the only items left untouched will be those that it would be disadvantageous to domestic industry to tax, such as large aircraft. Previous tariff rounds have already led to sharp declines in imports of affected goods, and further hikes are unlikely to have much of an effect.

With the September duties, the average American tariff on Chinese goods rises to slightly above 21%, up from about 3% before the trade war, according to Chad Bown of the Peterson Institute for International Economics. China’s average tariff on imports from the U.S. climbs to nearly 22%. (more…)

The Dog Days of August are Upon Us

  
  Analysis
#  #  #  #  #
The die is cast. To defend the uneven expansion and ward off disinflationary forces, monetary authorities will provide more accommodation.  The Federal Reserve delivered its first rate cut in more than a decade and stopped unwinding its balance sheet two months earlier than it previously indicated (worth $100 bln of additional buying of Treasuries and Agencies).  Following the end of the tariff truce, and after the July jobs report,  the market was certain the Fed would cut rates again in September, according to Bloomberg and CME calculations).
The ECB has signaled its intention to ease policy in September.  It is also thought to be considering several different tools, including a deeper negative deposit rate, renewed asset purchases, and perhaps, easier terms for the TLTRO that will be forthcoming at the start of Q4.
The BOJ has downgraded its growth forecasts and acknowledges that it will not meet its inflation target for at least the next two years.   It is unlikely to move until the after October when the impact of the sales tax increase can be assessed.
The US has lifted the debt ceiling and suspending spending caps.  US fiscal policy is less restrictive, and there is talk that the Trump Administration will support efforts to index capital gains.  UK government spending to prepare for a no-deal exit will increase, but it may prove insufficient to offset the private sector investment paralysis.  Germany, it would seem from the outside, has the need and resources to expand fiscal policy (and funding at negative yields), but it lacks the will.   On the other hand, Italy has the will but lacks the means.  Japan can provide a supplemental budget if the sales tax increase makes it necessary.

(more…)

Trump turned down idea from Mnuchin to warn the Chinese

  
  Analysis
#  #  #  #  #  #  #

Headline says: “Pres. announced tariffs after tense oval office meeting”

There is a headline saying that the president announced tariffs after a tense oval office meeting. According to the report, the president ruled out Treasury Secretary’s Mnuchin’s proposal to warn China of potential new tariffs.

It does not say how Lighthizer sided, but got to think he and Navarro were a thumbs up.  Larry Kudlow was likely a thumbs down.  If Wibur Ross was in the room, he would be a thumbs up too.

Trump’s new tariffs send Indices skidding lower.

  
Analysis, US Market
#  #  #  #  #

Major indices end near session lows.  Give up big gains in the process

Pres. Trump surprised the stock market by announcing 10% tariffs on $300B of China good effective September 1. He is on the wires saying that the tariffs can be raised beyond 25%, and said that the 10% is for a short term period.  I guess the combination means, the 10% will go to 25% if there is no progress, not the other way around (that is how I read the it).
The news reversed strong gains.
At the highs, the:
  • Dow was up 1.16% or 311.32 points
  • S&P was up 1.11% or 33.21 points
  • Nasdaq was up 1.66% or 135.61 points
At the close the final numbers are showing:
  • Dow, down -1.05% or -280.85 points at 26583.42
  • S&P down -0.90% or -26.82 points at 2953.56
  • Nasdaq down -0.79% or -64.298 points at 8111.12

Chinese companies looking to buy U.S. farm products -Xinhua

  
Analysis, Politics
#  #  #  #  #  #  #  #  #  #  #

Some Chinese companies are seeking new purchases of U.S. agricultural products, China’s official Xinhua News Agency said on Sunday, citing authorities, as Beijing and Washington look for ways to end a protracted trade war.

U.S. President Donald Trump and Chinese President Xi Jinping agreed at last month’s G-20 summit in Osaka to restart trade talks that stalled in May.

Trump said at the time he would not impose new tariffs and U.S. officials said China agreed to make agricultural purchases. But Trump said on July 11 that China was not living up to promises to buy U.S. farm goods.

Chinese businesses have made inquiries with U.S. exporters to buy crops and agricultural products and applied for the lifting of tariffs, Xinhua said, citing Chinese authorities. China’s Customs Tariff Commission will arrange for experts to appraise the Chinese companies’ tariff exclusion applications, Xinhua said.

“Relevant Chinese departments expressed hope that the United States would meet China halfway, and earnestly implement the United States’ relevant promises,” the news agency said, without elaborating.

The world’s two largest economies have been embroiled in a tariff battle since July 2018, as the United States presses China to address what it sees as decades of unfair and illegal trading practices. (more…)

Go to top