US businesses, Beijing react to $200B proposed tariffs on Chinese goods


A Chinese investor listens to a news report on his smartphone as he monitors stock prices at a brokerage house in Beijing, Friday, July 6, 2018. President Donald Trump made clear Thursday that U.S. tariffs against Chinese imports will take effect early Friday and that he’s prepared to sharply escalate a trade war between the world’s two biggest economies. (AP Photo/Mark Schiefelbein)

American farmers and businesses – set to be affected by a new round of proposed tariffs against China – are taking the Trump administration to task.

CGTN’s Jessica Stone reports.

The U.S. Trade Representative posted the list of hundreds of Chinese exports – totaling $200 billion – which will be subject to a ten percent tariff.

The tariffs could go into effect in September, after a public comment period.

“We are willing to engage in efforts that will lead to a resolution of our concerns about China’s unfair trade practices,” a senior administration official said on a briefing call with reporters, Tuesday evening.

The official added that the relationship between President Donald Trump and Xi Jinping is “excellent” and “we are open to discussions.”

But American agriculture and manufacturing advocates said tariffs are not the way to create a climate for discussions.

“Nobody wins in a global trade war,” said Dennis Slater, President of the Association of Equipment Manufacturers (AEM), adding that the tariffs “threaten many of the 1.3 million jobs our industry supports.”

“Tariffs are taxes on consumers and businesses,” AEM added. “We need policies that encourage manufacturing in the United States. Not the opposite.”

David Salmonsen of the American Farm Bureau Federation tells CGTN that last week’s round of tariffs closed off the Chinese market to U.S. pork producers—completely. He says the U.S. Department of Agriculture has been tasked to help farmers stay afloat when the levies start to bite. They can access a $30 billion line of credit, or seek more federal subsidies under the U.S. farm bill. But the costs could be steep.

“There’s no end date on these,” said Salmonsen, “If a deal happens the damage may not be so [bad.] But if they go on for months and months, the cost could be higher — if you’re going to try to make farmers anywhere near whole for their losses.”

Trump tweeted his support to American farmers:

“Other countries’ trade barriers and tariffs have been destroying their businesses…I am fighting for a level playing field for our farmers, and will win!”

China’s Ministry of Commerce released a statement, saying the U.S. actions are “completely unacceptable.”

The Chinese Ministry of Foreign Affairs echoed those sentiments.  Foreign Ministry Spokesperson, Hua Chunying accused the U.S. of “quintessential trade bullying,” adding that the new round of U.S. tariffs will cause global disruption. “Every economy is involved in the global industrial chain and the global value chain now. Their economies rely on each other, thrive together and jointly bear the consequences.”

During a Tuesday conference call convened by the office of the U.S. Trade Representative, CGTN America asked what can break the logjam.  A senior U.S. administration official said Washington wants Beijing to recognize “that U.S. concerns are real. They deny that we’re being hurt. They continue to insist that if we do anything to encourage them to change their behavior that they will attack the U.S. market.”

“Trade is critical to economic growth and supports millions of jobs from Silicon Valley,” the Information Technology Industry Council,” said in a statement. David Garfield, the council’s president and CEO, “the administration continues to impose more tariffs without a clear objective or end in sight, threatening American jobs, stifling economic investment, and increasing the prices of everyday goods.”

Garfield urged Trump to delay the tariffs, calling it an “unnecessary escalation.” Garfield called on the U.S. president to “instead make a concerted effort to build a coalition while he is in Europe this week and then negotiate with China to achieve tangible commitments including accountability mechanisms and implementation timelines.”

Silicon Valley and major blue chip companies like General Motors are especially exposed if Beijing decides in lieu of more tariffs to retaliate by limiting market access for U.S. companies.

Apple and Intel are on a list of 16 U.S. companies that earned total $105.5 billion in Chinese markets last year. That amounted to nearly a quarter of their total revenues, Jefferies analysts said Monday, according to a CNBC report.

General Motors topped 4 million vehicles sold in China for the first time in 2017.  That same year, China was GM’s largest retail market for the sixth consecutive year.

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