Yesterday US President Donald Trump announced a new round of tariffs against China to take effect from September 24, starting at 10 per cent, and rising to 25 per at the beginning of 2019.
The stock markets were the first to smell the change. Asian stocks were mixed; US stock futures declined; the dollar headed higher and the Chinese yuan fell, according to Bloomberg.
At 7:59 p.m. ET, Dow futures indicated a negative open of 100 points. The Nasdaq and the S&P 500 futures also indicated negative opens. The major indexes all closed lower on Monday, with the Dow falling nearly 100 points. The S&P 500 and the Nasdaq pulled back 0.6 percent and 1.4 percent, respectively. (CNBC)
According to Reuters, gold prices inched lower early on Tuesday: spot gold fell 0.1 percent at $1,199.20 an ounce as of 0027 GMT and US gold futures down 0.2 percent at $1,203.90.
The Chinese government is unexpectedly slow to react. Until now all state media including Xinhua and Global Times keep silent, apparently receiving no clear message from its top leadership.
Donald Trump warned that if China takes retaliatory action against U.S. farmers or industries, “we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports.”
“We have given China every opportunity to treat us more fairly, but so far, China has been unwilling to change its practices,” Trump tweeted.
While the Chinese market has been hit worst since April, and there is growing speculation that the country’s economy will collapse with more factories closing down and unemployment hitting a historical height.
Although this escalation of trade war has also hit some US farmers and manufacturers, the US people and government have never been so united to defend their national interests.
Earlier Trump tweeted, “Tariffs have put the US in a very strong bargaining position, with Billions of Dollars, and Jobs, flowing into our Country – and yet cost increases have thus far been almost unnoticeable.” “If countries will not make fair deals with us, they will be ‘Tariffed!'”
Globally, according to KPMG Australia chief economist Brendan Rynne, “Australia will be far more heavily bruised than the European Union or Japan.” Actually Australia deserves the result as it has made its own economy rely too much on exports to China, which is not sustainable in the long run.
According to KPMG, The initial tariffs will reduce Australia’s GDP by 0.3 per cent by 2022, and a $36 billion drop in economic growth over five years. If the tariffs rise to 25 per cent, however, the Australian economy will be $58 billion worse off over five years.
This second round of tariffs covers about half of imported Chinese goods. Some products were exempted from the tariffs after lobbying from companies including tech giant Apple and the chemical industry.
According to Business Insider, the final list of goods was tweaked slightly from the initial list released in July. Roughly 300 items, or tariff lines, were removed from the list including consumer electronics such as smartwatches, industrial chemicals, safety products like bicycle helmets, and child safety furniture like high chairs.
Here’s a rundown of the major goods that are on Trump’s new list:
- Meat: pork; beef intestine; rabbit meat; venison; frog legs
- Fish and seafood: live fish including ornamental fish, trout, eels, tuna, and carp; chilled or frozen meat of various types of trout, salmon, halibut, plaice, sole, albacore, tuna, herring, mackerel, cobia, swordfish, pollack, whiting, catfish, rays, and more; various types of salted or smoked fish; other seafood including various types of lobsters, crabs, shrimps, prawns, oysters, scallops, mussels, clams, squid, octopus, conchs, abalone, sea cucumbers, and sea urchins.
- Non-meat animal products such as eggs and dairy: Whey products; butter; various types of eggs including chicken; honey; hair of animals including human, hog, horse and badger; animal intestines, bladders; feathers; bones including shells, beaks, corals, hooves, antlers, and more.
- Vegetables: onions; garlic; cauliflower and broccoli; cabbage; carrots; turnips; radishes; beats; cucumbers; peas of various types; beans; lentils; celery; mushrooms; peppers of various types; squash; okra; sweet corn; potatoes; sweet potatoes and yams; some types of tomatoes; spinach; Brussels sprouts.
- Fruit and Nuts: Coconuts; cashews; almonds; hazelnuts; walnuts; chestnuts; pistachios; macadamia nuts; pecans; dates; figs; pineapples; guavas; oranges; mandarins; clementines; raisins; grapes; apples; pears; quinces; peaches; berries including strawberries, raspberries, cranberries, blueberries and others; bananas; a variety of dried fruits; peels of various fruits.
- Cereals: wheat, including durum wheat; barley; oats; corn; various types of rice; grain sorghum; buckwheat; quinoa; and more.
- Mill products: flours including those from wheat, corn, buckwheat, rice, rye, other cereals, potatoes, and bananas; goats and meal of various types including wheat, corn, oats, and rice; malt; starches of wheat, corn, potato, and more
- Oil seeds: soybeans; seeds of sunflower, flax seed, sesame, mustard, poppy and more; planting seeds for certain crops; cocoas and mint leaves; and seaweeds.
- Sugars and candies: cane sugar; candies with no cocoa
- Breads and Pasta: uncooked pasta; various breads, pastries, cakes, and biscuits.
- Prepared vegetables and fruits: various vegetables and fruits previously listen in their prepared or preserved forms; various fruit jams including strawberry, pineapple, apricot, and more; peanut butter; various fruit juices including orange, pineapple, lime, grape, apple, and more.
- Other food items: soy sauce; condiments and seasonings; protein concentrates.
- Beverages and vinegars: water, including mineral water; fruit or vegetable juices and juice mixes; beer from malt; wine, including rice wine; ethyl alcohol; vinegars
- Food processing waste and animal feed: brans from processing; oil cakes; dog or cat food; animal feed
- Tobacco products: various types and preparations of tobacco; tobacco refuse; cigars; cigarettes; smoking tobacco
- Salts and minerals: salt/sodium chloride; sulphur; graphite; quartz; types of clays; chalk; slate; marble; granite; sandstone; dolomite; gypsum; some plasters; some types of cement; mica; Epsom salts
- Ores, slag, and ash: ores of iron, copper, nickel, cobalt, aluminium, lead, zinc, tin, chromium, tungsten, uranium, titanium, silver, other precious metals, and others; slag, various types of ash.
- Mineral fuels and oils: coal; lignite; peat; coke; tars; various types of light oil; various types of kerosene; petroleum oils; liquefied fuels including natural gas, propane, butane, ethylene, and petroleum; oil shale and tar sands
- Inorganic Chemicals: chemicals such as chlorine, sulphur; carbon, nitrogen, oxygen, and silicon; acids including sulfuric, nitric, and more; various types of fluorides, chlorides, sulfates, nitrates, carbonates, and more. (See full list below.)
- Organic chemicals: (See full list below.)
- Fertilisers: animal or vegetable fertilisers; urea; ammonium sulfate; sodium nitrate; and more.
- Tanning and drying extracts, dyes, and paints
- Essential oils, perfumes: perfume; lip or eye make-up preparations; manicure or pedicure products; shampoo; hairspray; bath salts.
- Soaps and cleaning products: various types of soap; leather and textile treatments; polishes for shoes and furniture.
- Glues, adhesives, and enzymes
- Cigarette lighter fluid
- Photographic goods: various types of photo plates; instant film; various types of film in rolls; various types of motion picture film.
- Various chemical products: pesticides; herbicides; fungicides
- Plastics: vinyl flooring and other plastic floor and wall coverings; sausage casings; bags; gloves including baseball gloves; rain jackets; machinery belts.
- Rubber: latex; rods, tubes, and other products; conveyor belts; various types of transmission belts; various types of pneumatic tires; gloves; gaskets; dock fenders.
- Raw hides and leather: animal skins including cow, buffalo, sheep, goats, reptile; various types of leather made from cow, buffalo, sheep, goats, reptile; leather trunks and suitcases; leather handbags; CD cases; gloves including ski, ice hockey, and typical use; belts; fur clothing, incluidng artificial fur.
- Wood: fuel wood; charcoal; various types of wood including oak, beech, maple, ash and cherry; moldings; rods; particleboard; various types of plywood; doors; corks and stoppers; wicker and bamboo baskets.
- Wood pulp products
- Paper: Newsprint; writing paper; vegetable parchment; carbon paper; self-adhesive paper; cigarette paper; envelopes; tablecloths; handkerchiefs; folders.
- Wool or animal hair products: cashmere; yarns; tapestries and upholstery.
- Cotton: fibres; thread; yarn; denim; satin.
- Flax: yarn; fabrics
- Man-made textiles: polypropylene; rayon; nylon; polyester
- Other textile products, rope, twine: hammocks; fish nets; carpets;
- Fabrics: corduroy; gauze; terry towel; lace; badges; embroidery
- Headgear: caps; hairnets; wool hats; safety headgear like hard hats; head bands.
- Stone, plaster, cement, asbestos: stone for art; marble slabs; roofing slate; millstones; sandpaper; floor or wall tiles; cement bricks.
- Ceramics: fire bricks; pipes; tiles; porcelain and china.
- Glass and glassware: balls; rods; drawn or blown glass; float glass; tempered safety glass; mirrors; carboys, bottles, jars, pots, flasks, and other containers; microscope slides; woven fibreglass
- Precious stones and pearls: diamonds; silver and products made of silver; gold and products made of gold; platinum; palladium.
- Iron and steel and products derived from the metals:drums; tubes; pipes; doors; windows; screws; horseshoes;
- Copper: plates; cables; tubes; pipes; springs
- Nickel: bars; rods; wires
- Aluminium: powder; cable; wire; screws.
- Various metal products, tools, cutlery: industrial items made from lead, zinc, tin, and more; saw blades; bolt cutters; hammers; wrenches; crow bars.
- Machinery, both industrial and retail: steam turbines; engines; fuel-injection pumps; air compressors; air conditioning machines; refrigerators; cream separators; hydraulic jacks; escalators; manure spreaders; copiers; automatic beverage-vending machines
- Electronics: vacuum cleaners; hair clippers; spark plugs; generators; bicycle lights; electric amps; television cameras; various types of TVs; video projectors.
- Vehicles and parts: axles; driving shafts; gear boxes; radiators.
- Ships and boats: sailboats; motorboats; canoes; yachts.
- Instruments for scientific or medical purposes: microscopes; cameras for non-art purposes; gauges for pressure, electrical currents, and more.
- Clocks and watches
- Furniture, bedding, mattresses: car seats; wood chairs; furniture designed for offices, kitchens, and more; mattresses; chandeliers; lamps.
- Assorted items: buttons; stamps; paintings; collections of zoological, botanical, mineralogical, anatomical, historical, archaeological interest; antiques of an age exceeding one hundred years