Natalie Sherman
Business Reporter, New York
Watch: Trump says the prices will be “legendary” before 104% of China tax
President Donald Trump scams the book of trade rules that has been in place for over 50 years.
His latest series of scanning prices, which entered into force shortly after midnight Wednesday, strikes the goods of some of the largest American trade partners, including China and the European Union, with dramatic increases in import rights.
The president and his allies say that the measures are necessary to restore the American manufacturing base, which they consider as essential to national security.
But there remains a potentially seismic action, affecting more than 2 imports of imports, which will push the overall effective rate rate in the United States at the highest level in more than a century.
In the United States, the main consumer goods could see huge price increases, including approximately 33% for clothing, and analysts warn against almost concealed economic damage
With the stock market and political pressure in the United States that starts to build, the White House has worked to appease the nerves by floating the possibility of commercial talks, praising conversations that have already started with Japan, Vietnam and South Korea.
But Trump reported resistance to the types of exemptions he granted during his first mandate, and even if these talks are ultimately productive, the country by country will undoubtedly take time.
“The main question … is whether or not there will be negotiations,” said Thierry Wizman, a global strategist for the Macquarie Investment Bank. “And no one has an answer to that because it will depend on the approach and the provision of the negotiation parties.”
The United States is already appearing on a collision trajectory with China, which was its third largest import supplier last year.
The White House said on Tuesday that it was going ahead with Trump’s social media threat to add an additional 50% levy on imports from China, in addition to the 54% of the rights that had already been announced, unless Beijing accepts to withdraw its reprisals.
Liu Pengyu, spokesperson for the Chinese Embassy in Washington, refused to say if the two parties had spoken directly from the threat.
But publicly, China has shown little willingness to retreat, describing Trump’s movements as “intimidation” and warning that “intimidation, threat and blackmail are not the right way to engage with China”.
“If the United States decides not to worry about the interests of the United States itself, China and the rest of the world, and is determined to fight against a price and a trade war, China’s response will continue until the end,” he said in a statement.
Watch: How Beijing reacts to Trump’s price hiking
The rapid change has shaken American companies with decades of links with China, which are now paralyzed and do not know how this climbing commercial struggle could end.
“You laugh if you don’t cry,” said American businessman Jay Foreman, including the Basic Fun toy company! is known for classics such as tonka trucks and care bears, the vast majority of which are made in China.
He put an opinion on his suppliers to interrupt shipments in the United States earlier this week, when the United States announced that it struck China’s goods with tasks from 104%.
“We just have to hold our expeditions until this thing is settled,” he said. “And if this is not settled, they will sell the inventory that I have in my warehouse and pray.”
Addressing the congress on Tuesday, Jamieson Greer, who heads the office of the US trade representative, refused to set a calendar for the speed with which discussions could progress.
“The president is set with his goal. This trade deficit and relocation and the loss of jobs have persisted for too long,” he said, while recognizing that the measures could lead to “difficult” economic adjustment.
“It is a moment of radical change and late, but I am convinced that the American people will come up in occasion as they have done before,” he said.
The sharing of the United States resumed its slide on Tuesday, abandoning the early gains stimulated by Trump comments on commercial negotiations that the fight could see a rapid resolution.
The S&P 500 has now been negotiated at its lowest level for more than a year, after having seen around 12% of its destroyed value since the announcement last Wednesday.
Japan’s stock markets to Germany have also been shaken, as investors assess the wider repercussions of shares. In the United Kingdom, the FTSE 100 dropped by around 10%.
“What I really see is an apprehension, an uncertainty, many questions, many people who want us to predict what will happen then,” said Amy Magnus, director of compliance and customs affairs to Demerer, a company based in Vermont which is one of the five best American customs brokers. “But I got into a world that I can’t predict.”
Erin Williamson, vice-president of the American customs brokerage at Geodis, a world supply chain operator, said Tuesday afternoon, uncertainty had prompted some of his business customers to break up.
“One of the main ways of confirming that you do not put your business in danger is really to hold until perhaps the dust sets in,” she said.
Uncertainty is to increase the risks of the economy, said Ernie Tedeschi, director of the Yale budget economy, who did not predict a recession in the United States, but still expects to be announced this year for the purchase of 600,000 United States and will lead to a gross blow of $ 3,800 to acquire the power of the average household.
“A large part of the market disorders that we have seen does not concern the substance of the economic damage of the prices by themselves. Much of the uncertainty,” he said.
“Companies and consumers do not know what the pricing rate will be in an hour … How can you invest or make plans for the future in this environment?”
Mr. Tedeschi said he had not seen any clear end to the trade war in sight.
“Even if the administration wanted to step back, how does it save the face in a way that is mutually acceptable to all the players concerned?” He said. “It becomes more difficult day by day.”
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