Wednesday, 18 July, 2018

World stocks fall, haunted by concerns over US-China tariffs

A U.S. Customs sign is shown on a fenced area holing imported vehicles after arriving in the United States in National City California Trump's trade war could really slam N.J. companies and cost jobs here, top business group warns
Nellie Chapman | 04 July, 2018, 01:35

Donald Trump's trade war and policies, in general, are now being attacked by the U.S. Chamber of Commerce.

The trade policies have led to some countries threatening to retaliate, including Canada, which vowed Friday to impose tariffs on $12.6 billion worth of American products until the U.S.'s steel and aluminum tariffs are rolled back.

The U.S. has threatened to impose duties on up to $450 billion of Chinese imports, with the first $34 billion portion set to go into effect on July 6.

The United States has imposed tariffs on European steel and aluminum imports and is conducting another national security study that could lead to tariffs on imports of cars and auto parts. After receiving public feedback, the administration cut 515 imports from the blacklist and added 284 others.

The European Union says that for some goods, such as trucks, usa import duties are higher.

"They send Mercedes, they send the BMWs, we tax them practically nothing", Trump said during a campaign event for Henry McMaster in Columbia the night prior to the tweet.

For example, the Chamber said Texas could see $3.9 billion worth of exports targeted by retaliatory tariffs; Tennessee, $1.4 billion; and SC, $3 billion. It calculated that a 25% tariff would slash an initial $13-14 billion off U.S. gross domestic product, with no predicted improvements to its own incomes. Taking countermeasures against recent tariffs put on imported aluminum and steel as a guideline, the report assesses potential indirect costs at up to $294 billion.

A slew of factory readings from across the globe are due on Monday, while the U.S. ISM report is out on Tuesday.

Officials in Brussels stressed that European car-makers account for up to 26-percent of USA automotive output.

"Obviously the biggest thing [Trump] has to hit us over the head with now is the threat of the auto tariffs", Warner said. Harley Davidson announced it was moving some manufacturing overseas to avoid European Union motorcycle tariffs brought in as a response to U.S. duties on steel and aluminium imports. The U.S. has higher tariffs on trucks and other products, she said.

Two major auto groups last week said that imposing up to 25 percent tariffs on imported vehicles would eliminate hundreds of thousands of jobs, according to Reuters. "It is bad what they do to us", before mentioning the "car situation". This weekend, Ottawa imposed tariffs on U.S. goods worth around $12.6 billion.

Its ironic that the protectionist concept of trade tariffs will essentially threaten jobs in the U.S., as usual in any conflict, trade or otherwise, there is always "collateral damage".