If tariffs are going to go from 10% to 25% on $200 billion worth of goods, this might only represent an additional cost to the US economy of about $30 billion (at a new $50 billion, versus a prior $20 billion) using straight-line math.
The latest trade data, which would normally be pored over for clues on how the world's second-largest economy is faring, has been overshadowed by worries that the US-China trade war is escalating, rather than nearing a resolution as many investors had expected. Beijing has counterpunched by targeting $US110 billion worth of American imports, focusing on farm products such as soybeans in a deliberate effort to inflict pain on Mr Trump's supporters in the U.S. heartland.
High-level Chinese and USA negotiators will meet in Washington in the next two days, as Beijing tries to avoid a sharp increase in tariffs on its goods ordered by President Donald Trump to take effect on Friday. Exports to the United States, China's biggest foreign market, were down 13% at $31.4 billion. Trump alleged. "Guess what, that's not going to happen!"
The Chinese vice premier Liu He is now travelling to the U.S. for two days of trade talks; with the latest tariff hike scheduled for midnight EDT on Friday, the changes will arrive in the middle of his trip.
China's Commerce Ministry confirmed that Liu, who leads the talks for Beijing, will visit the USA on Thursday and Friday.
On Monday, after President Trump threatened to raise the tariffs, the Dow fell more than 450 points, before recovering to close down 66 points.
Uber & Lyft Drivers To Ruin Morning Commutes With Worldwide Strike
The strikes are expected to happen across major U.S. cities, as well as parts of the United Kingdom, Australia and South America. The New York City Taxi Workers Alliance said its members voted not to drive for Uber or Lyft between 7am and 9am on Wednesday.
Trump vowed Sunday to ratchet up existing tariffs this week and also to extend the 25 percent punitive duties to the remaining $350 billion in Chinese goods imported into the country each year.
He added that the Chinese delegation would still be coming to Washington for trade talks, which will now begin tomorrow, a day later than previously scheduled.
"In the most recent negotiations, China has chosen to retreat from specific commitments agreed to in earlier rounds".
Major stock indexes in trade-reliant Asia continued to fall on Wednesday, tracking a slide on Wall Street.
Oxford Economics warned that escalating the tariffs to the remaining Chinese goods, which would be expected to spark further retaliation from Beijing, would cut 0.3 percentage points off United States growth.
Fueling that decision is the president's growing confidence that his trade policies are bolstering the US economy, without any downside.
We think China trade talks will negatively impact our universe. China would also have to move further towards the USA position on other sticking points, such as demands for curbs on Chinese industrial subsidies and a streamlined approval process for genetically engineered US crops. That would effectively cover all goods imported into the US from China, including electronic gear, apparel and other products previously exempted from earlier tariff hikes.