The trade war escalates.
The US and China appear to be locked into an escalating trade war, as tit-for-tat tariffs continue.
US President Donald Trump has responded to China’s tariff hikes – which were a response to earlier hikes by the US – with the suggestion that an additional $100 billion in tariffs could be levied against the Communist state.
Here is the full White House Statement announcing the new tariffs:
“Following a thorough investigation under section 301 of the Trade Act of 1974, the United States Trade Representative (USTR) determined that China has repeatedly engaged in practices to unfairly obtain America’s intellectual property. The practices detailed in the USTR’s investigation have caused concern around the world. China’s illicit trade practices — ignored for years by Washington — have destroyed thousands of American factories and millions of American jobs. On April 3, 2018, the USTR announced approximately $50 billion in proposed tariffs on imports from China as an initial means to obtain the elimination of policies and practices identified in the investigation.
“Rather than remedy its misconduct, China has chosen to harm our farmers and manufacturers. In light of China’s unfair retaliation, I have instructed the USTR to consider whether $100 billion of additional tariffs would be appropriate under section 301 and, if so, to identify the products upon which to impose such tariffs. I have also instructed the Secretary of Agriculture, with the support of other members of my Cabinet, to use his broad authority to implement a plan to protect our farmers and agricultural interests.
“Notwithstanding these actions, the United States is still prepared to have discussions in further support of our commitment to achieving free, fair, and reciprocal trade and to protect the technology and intellectual property of American companies and American people. Trade barriers must be taken down to enhance economic growth in America and around the world. I am committed to enabling American companies and workers to compete on a level playing field around the world, and I will never allow unfair trade practices to undermine American interests.”
While much attention has been focused on the fact that Trump initiated this trade dispute, the US is responding to an unfair situation that is heavily skewed in China’s favour.
China has far higher tariffs on US products than the US has on China’s products, which has led the US to have a massive trade deficit with China – which has cost the US tons of jobs.
China was never going to try and remedy that situation, since it benefits them, so the US would have always had to make the first move to remedy the problem.
Notably, Canada also has a large – and growing – trade deficit with China – something the Trudeau government has been unwilling to address.
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