Impact of U.S-China trade tariffs on USA companies

Lloyd Doyle
July 22, 2018

President Donald Trump on Friday escalated his threats to punish China for its trade policies, warning anew that he's prepared to impose tariffs on all Chinese imports and arguing that Beijing has manipulated its currency at the expense of the United States.

In excerpts of an interview with U.S. television network CNBC aired Thursday, Trump said a strong dollar "puts us at a disadvantage", adding that the Chinese yuan "has been dropping like a rock". "I'm not doing this for politics, I'm doing this to do the right thing for our country".

"The dollar is an important issue today especially because we have been on a rise for quite a long time", said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas. Earlier this month, the United States also scheduled additional tariffs on $16bn of Chinese electronics and other components. Last week, the White House announced a possible second tranche targeting up to $200 billion worth of goods.

State-owned China Global Television Network on Friday posted a video, first spotted by Reuters, seemingly created to undermine support for Trump's trade policies.

Overnight, the United States president launched a "rare attack on America's central bankers", The Guardian says, revealing that he "wasn't happy with their plans to raise United States interest rates".

"I don't want them to be scared". China promptly levied taxes on the same value of USA products. "But it was very unfair".

Trump also tweeted that the European Union and China were manipulating their currencies lower, creating an uneven playing field with the US.

That is "taking away our big competitive edge".

Its decline provides "a significant offset to the loss in export competitiveness for Chinese exporters due to higher U.S. tariffs", Rajiv Biswas, chief Asia economist with IHS Markit, told AFP.

The chance inflation might accelerate has increased after the massive tax cut Mr. Trump championed, which has raised the US debt and budget deficit.

In excerpts of an interview with USA television network CNBC aired Thursday, Trump said a strong dollar "puts us at a disadvantage", adding that the Chinese yuan "has been dropping like a rock".

The US dollar fell against major currencies on Mr Trump's threat to impose more import tariffs and his repetition of complaints about rising interest rates and the strength of the US dollar.

Analysts said China seemed content to let the yuan weaken - for now.

About $US505 billion ($680.3 billion) of Chinese goods were imported to the US in 2017, leading to a trade deficit of almost $US376 billion ($506.5 billion), US government data showed. With those nations nearly certain to retaliate, the result could be higher prices for Americans, diminished export sales and a weaker USA economy by next year. That makes it more attractive for investors to hold U.S. dollars, prompting them to sell other currencies.

China's central bank is already allowing the tightly controlled yuan to drift lower against the dollar in a bid to help Chinese exporters cope with Trump's tariff hikes. However, such a maneuver risks reigniting an outflow of capital that Beijing has spent months trying to halt.

Other reports by Iphone Fresh

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