President Donald Trump will announce tariffs on Chinese imports at 12:30 ET Thursday, a White House official said. The move is aimed at curbing theft of U.S. technology and likely to trigger retaliation from Beijing and incite fears of a global trade war.
There was no indication of the size and scope of the tariffs, which U.S. Trade Representative Robert Lighthizer said on Wednesday would target China’s high-technology sector and could also include restrictions on Chinese investments in the United States. Lighthizer told the House of Representatives Ways and Means Committee, a top economic panel, that the aim would be to minimize the impact of any tariffs on U.S. consumers. The United States runs a hefty goods trade deficit with China of $375 billion.
China has already identified agriculture as a U.S. weak point and has said it would target soybeans, a $14 billion-a-year business. Agriculture and transport equipment could be hit in return. A global trade war would have much harsher economic consequences, possibly hitting the dollar, U.S. stock markets and currencies as varied as the Mexican peso and the Australian dollar, according to analysis from investment bank Morgan Stanley.
The risk of an escalation in which there were a broad-based tariff across a range of Chinese goods followed by a response from Beijing that was commensurate with that would cause a hit to U.S. and Chinese growth, a rise in U.S. inflation and possibly prompt China to take domestic action to boost growth.
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Louis Kuijs, head of Asia economics research at Oxford Economics, told Reuters if trade deficits were measured to account for the complex nature of global supply chains like the ones used by sophisticated consumer products like smartphones, the US-China trade deficit would be about 36% lower, or $239 billion.
“With the electric vehicles, I think they’re fine for smaller duty, pickup and delivery stuff, that works better. I do wonder about the Semi. I don’t know that long haul duty is the best for that.”
– Michael Baudendistel, Stifel Analyst
In other news:
FedEx posts positive results in fiscal third quarter; ground margins gain
Margin growth at ground unit allays fears of costs eating into profits. (DC Velocity)
AirAsia considering its own cryptocurrency in push for cashless system
The low-cost airline would be one of the most established companies in Southeast Asia to enter the crypto market. (Forbes)
Businesses increase prices, switch suppliers ahead of Brexit
Companies are following a two-pronged approach ahead of Britain’s exit from the European Union, according to a survey by the Chartered Institute of Procurement & Supply (CIPS). (WSJ)
Cheerios could get pricier as General Mills faces rising costs
The maker of Yoplait yogurt said freight costs in North America were near 20-year highs in February. (WSJ)
Amazon is now second most valuable U.S.-listed company, tops Alphabet
Amazon has surpassed Alphabet to become the second most valuable publicly listed US company. (Reuters)
In a statement, the Institution of Mechanical Engineers said that Uber was right to suspend autonomous vehicle trials while the accident is being investigated. “In 2016 the IMechE in our case study on autonomous and driverless cars raised the needs to address societal questions before highly and fully automated cars are both accepted and legally able to be positioned on our roads,” said head of engineering Jenifer Baxter. “Engineers will need to create an environment where connected autonomous vehicles can operate safely with or without an operator during the transition period to a fully autonomous vehicle system. This transition period could last for several decades.”
Hammer down everyone!
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