Trump & Trade: Feeling the pressure - ING

Fredrick Soto
September 19, 2018

Meanwhile Beijing's plans for tariffs on $60 billion of US goods include an additional 5 percent duty on about 1,600 kinds of USA products including smaller aircraft, computers and textiles, and an extra 10 percent on more than 3,500 items including chemicals, meat, wheat, wine and LNG.

The US Trade Representative has published the full list of goods covered by the tariffs, from "frozen retail cuts of meat of swine" and live eels through to "monopods, bipods, tripods and similar articles of aluminum", here (PDF).

The trade war could hit the oil and gas markets in several ways.

The tariffs will place an additional 5-percent in duty on US products including smaller aircraft, computers and textiles, and an extra 10-percent on goods such as chemicals, meat, wheat and wine.

The US imported around $500 billion worth of products from China past year, compared to $130 billion in US goods imported by the Asian country.

Stocks shrugged off the latest ratcheting up of trade tensions, with the S&P 500 Index, Dow Jones Industrial Average and Nasdaq Composite Index all higher.

In light of the USA action, China is reviewing plans to send a delegation to Washington for new talks, the South China Morning Post reported on Tuesday, citing a government source in Beijing.

China has made a decision to slap levy on almost everything it imports from the U.S. in the ongoing tit-for-tat tariff war with the US.

Still, a solution to the trade conflict seems a long way off. "Start building new plants now", he tweeted on Sept 8. China has emerged as the main driver of LNG demand growth, and any new export terminal located anywhere around the world likely has China at the center of its calculations. It will also do a lot of damage to the U.S. itself.

The statement did not mention Beijing's earlier threat to add tariffs on $60 billion in United States imports if Washington imposed this new wave of levies.

Apple Watch, AirPods excluded from next round of tariffs says new report
Trump reportedly poised to slap tariffs on an additional $200 billion worth of Chinese imports

"We welcome this development and we appreciate the administration's time and effort to listen to industry and consumer concerns", a Fitbit spokeswoman told Reuters.

Also spared from the tariffs were Chinese inputs for USA -produced chemicals used in manufacturing, textiles and agriculture. "What China does not understand is that these people are great patriots and fully understand that".

Of the total $250 billion in tariffs, the USTR issued the following statement.

"Tariffs have put the USA in a very strong bargaining position, with Billions of Dollars, and Jobs, flowing into our Country - and yet cost increases have thus far been nearly unnoticeable", Trump said on Twitter.

US stock markets opened higher and the Nasdaq index was up 1 over 1 percent by mid-morning. "Business hates uncertainty. They'd rather have an imperfect trading relationship than this much chaos".

The larger effect on the oil market would come from the negative impact on the global economy. "The Administration will continue to encourage China to allow for fair trade with the United States". "Crude oil processing in the USA and China is at or near a record level", Commerzbank wrote in a note.

The world's two largest economies had already applied tariffs to £38 billion of each other's goods.

"They also know that I am the one that knows how to stop it. This has not been the case as yet". But Beijing has other ways to retaliate.

With 50 days to go before crucial mid-term elections and many in Trump's own Republican party are queasy about Trump's trade wars, which have drawn loud objections from senior figures within the party. On Monday and Tuesday, oil prices did exhibit any significant price swings.

Other reports by

Discuss This Article