At a time when the world thinks the Sino-US trade war is over, Trump is reluctant to be lonely and light the fire of the trade war. At the end of May, the United States flagrantly launched a trade war, raising taxes on China, Europe and other countries, and the euro, the United States and Japan were crushed by dark clouds!
The trade war between China and the United States once eased, but now it is back, and China has fought back forcefully!
17-18 May 2018, The Chinese delegation, led by President Xi Jinping's special envoy and Vice Premier Liu he, and the US delegation, including Treasury Secretary Mnuchin, Commerce Minister Ross, and Trade Representative Leitsizer, held consultations on the trade issue. The two sides agreed to take effective measures to substantially reduce the US trade deficit in goods with China. The two sides agreed to increase US agricultural and energy exports in a meaningful manner, and the US side will send a delegation to China to discuss specific matters. The two sides discussed expanding trade in manufactured goods and services and reached consensus on creating favourable conditions to increase trade in these areas. The two sides attached great importance to the protection of intellectual property rights and agreed to strengthen cooperation. China will push ahead with the revision of relevant laws and regulations, including the Patent Law.
However, a sudden statement from the White House on May 29 said that the United States will strengthen export controls on relevant Chinese individuals and entities that have access to major technologies in US industry, and adopt specific investment restrictions, and plans to formally announce the relevant measures by June 30. It will be formally implemented shortly thereafter; The statement also said that under Article 301 of the 1974 Trade Law, the United States will impose a 25 per cent tariff on imports of US $50 billion worth of high-tech products from China, including those related to the "made in China 2025" plan; The final list of imports will be published by June 15 and tariffs will be imposed at a later date. This shift has led to a resurgence of the Sino-US trade war crisis.
After the White House statement, the Chinese Department of Commerce responded quickly late at night that we were both surprised but also expected by the strategic statement issued by the White House, which was clearly contrary to the consensus reached between China and the United States in Washington not long ago. No matter what measures the US side takes, China has the confidence, ability and experience to safeguard the interests of the Chinese people and the core interests of the country. China urges the United States to act in accordance with the spirit of the Joint Declaration.
Then on the afternoon of May 30, it was reported that the US economic and trade consultation team had arrived in Beijing. In the next few days, a team of more than 50 people from the US side will hold consultations with the Chinese team on the concrete implementation of the consensus on the joint statement between China and the United States.
On 3 June, the Chinese side and the United States made a consultative statement, and on 5 June, the US side issued a consultative statement. the two statements were brief but rich in meaning.
China: China's attitude has always been consistent. In order to meet the growing needs of the people for a better life and meet the requirements of high-quality economic development, China is willing to increase imports from all countries in the world, including the United States, which is beneficial to the peoples of the two countries and the world as a whole. Reform and opening up and expanding domestic demand are China's national strategy, and our established pace will not change. The results reached between China and the United States should be based on the premise that the two sides should face each other and do not fight a trade war. If the US side puts in place trade sanctions, including tariff increases, all the economic and trade results negotiated between the two sides will not take effect.
Us: the meeting focused on meeting China's growing consumer demand by facilitating agricultural and energy exports to China, reducing the US trade deficit, boosting US economic growth and creating US jobs. Officials of the US delegation conveyed to China President Trump's clear goal of achieving a fair trade relationship between the two countries. The United States delegation will report on the consultations with a view to obtaining instructions on the way forward in advancing this goal.
The United States "goes to war" with Europe, Canada and Mexico at the same time, sparking a global trade war, and many countries will take countermeasures in response to the "war" between the United States and Europe, Canada and Mexico at the same time.
On the evening of May 31, the United States announced an additional 25 percent steel tariff and 10 percent aluminum tariff on its main trading partners Canada, Mexico and the European Union, effective from 0: 00 East time (12:00 Beijing time on June 1).
Us Commerce Secretary Wilbur Ross said US Commerce Secretary Ross said progress had been made in negotiations with the European Union and the renegotiation of Nafta with Canada and Mexico, but not enough to continue to exempt the countries concerned from tariffs. The United States still wants to continue trade negotiations with Canada, Mexico and the European Union, as there are other issues to be resolved. Immediately after the news, the European Union, Mexico and Canada said they would retaliate.
The EU reacted strongly and made its demands through the WTO
Cecilia Mamstrom (Cecilia Malmstrom), the EU's trade commissioner, gave a clear signal of retaliation as soon as Mr Trump decided to impose tariffs on steel and aluminium. The EU's first list of 25 per cent tariffs on US imports includes Harley Davidson motorcycles, Reeves and bourbon, while the EU will retain the right to impose higher tariffs on more US products, Mr Mamstrom said.
The UK said: as a close ally, "very disappointed"! Liam Fox, Britain's international trade secretary, said: "it is disappointing that the United States has chosen to levy a steel and aluminum tax on EU countries and allies on the grounds of national security. As a steel exporter, the UK considers this move to be ridiculous. "
German Chancellor Angela Merkel attacked the US tariffs on steel and aluminium as "unilateral" and "illegal", warning that it would lead to an "escalation of retaliation" that would "ultimately hurt everyone". German Foreign Minister Maas responded on the same day that the unilateral steel and aluminum tariffs in the United States were "illegal," saying that he did not recognize the Trump administration's decision. Olaf Schultz, Germany's finance minister, said the EU's response to tariffs must be "clear, firm and rational".
France: this is the economic nationalism that people did in the 1930s, which means war Macron believes that the decision to tax in the United States is wrong, warning that "economic nationalism" will punish everyone, including the United States.
The EU fired its first shot at US steel and aluminium tariffs over the weekend. The EU has challenged through the World Trade Organisation (WTO) and vowed to impose tariffs on US exports, in a sign that the EU will engage in a tit-for-tat confrontation with US President Donald Trump on trade issues. By filing a complaint with the WTO, the EU has challenged the US tax initiative advocated by Mr Trump on national security grounds, a rare feud between the two transatlantic allies. Reported that the EU stressed that Europe is eager to control differences with the United States.
Canada: you want to fight! I'll fight!
After the US side announced tariff measures against Canada, Canadian Prime Minister Trudeau sent five Weibo "response" Trudeau, saying: "it is unacceptable for the United States to impose tariffs on Canada's steel and aluminum industries. As we have already stated, we always defend the interests of our workers. Today we announced retaliatory measures in response to the attack on our industry. "
"Canada will impose tariffs on imports of steel, aluminum and other products from the United States-the United States will levy a dollar on Canada, and we will levy a dollar on the United States," he said. These countermeasures, which are aimed only at goods originating in the United States, entered into force on 1 July and lasted until the lifting of the trade restrictions imposed by the United States against Canada.
Canadian Prime Minister Trudeau and Foreign Minister Freeland announced at a press conference in Ottawa today that retaliatory tariffs will be imposed on 16.6 billion Canadian dollars worth of US products such as steel and aluminum products. This amount is equal to the amount of tax levied by the United States on Canada. Canada announced on the same day two retaliatory tax lists against the United States: one list will charge a 25% tariff, mainly steel and aluminum products; The second list, with a customs duty of 10 per cent, covers a number of categories, such as food, alcohol, electrical appliances, daily necessities, such as beer buckets, whiskey, toilet paper, maple syrup, pesticides, motorboats, etc.
Mexico: start fighting back, tariff plan comes into effect on June 6
Mexico's Ministry of economy issued a communiqu é on May 31, saying that it deeply regrets and opposes the US decision to impose high tariffs on steel and aluminum products from the European Union, Canada, and Mexico, and announced reciprocal measures against some products from the United States.
In the face of the decision of the United States to impose high tariffs, Mexico will also implement reciprocal measures of the same scale on a variety of products from the United States. These products include flat steel, lamps, pig legs and pork shoulder meat, sausage and food preparations, apples, grapes, blueberries, cheese, etc. The communique pointed out that Mexico's countermeasures will remain in force until the US government stops imposing high tariffs on steel and aluminum products.
The Mexican government will impose a 20 percent tariff on pork leg meat and scapular meat imported from the United States, with effect from June 6, Reuters reported Friday, citing sources. Mexican pork producers say Mexico is likely to increase pork imports from Brazil if it decides to impose a long-term tax on pork imports from the United States, Reuters reported. Tariffs could also raise Mexican pork prices and curb consumption.
"the trade war came at a time when a series of conflicts came. In this case, this is just the first step in the response. " Guajardo, Mexico's economy minister, warned Mexican radio at the time that Mexico had only just begun reciprocal retaliation.
What will the dollar do in the gloom of the trade war
Mr Trump's insistence has put the global trade war in a scuffle mode and world trade tensions have risen sharply, with Roberto Azevedo, the director-general of the World Trade Organisation, warning members not to move towards a trade war or the trade war will get out of hand.
In the gloom of the trade war last week, bright non-agricultural data did not help the dollar, which fell back near the 94 mark and continued to be weak again earlier this week.
This week's G7 summit, which will be held in Charlevoix, Quebec, Canada, from June 8 to 9, Beijing time, is also a cause for concern. Last week, the Trump administration imposed tariffs on steel and aluminum imports from Canada, Mexico and the European Union on national security grounds, angering allies in the United States. These countries vowed to take retaliatory measures. The move was also rarely condemned by G7 partners, with finance ministers from six G7 countries issuing a joint statement expressing their "unanimous concern and disappointment" about the US decision. As trade tensions escalate, the prospects for the North American Free Trade Agreement remain uncertain. The agreement was intended to be reached before the G7 leaders' meeting in May. In addition, last weekend's trade talks between the United States and Canada ended in vain. Michael Hewson, chief market analyst at CMC Markets, said this week's G7 summit would see a lot of outspoken discussion after President Trump decided to impose steel and aluminum tariffs on Canada, Mexico and the European Union. Curiously, Mr Trump's overconfidence is only a sign that he treats his enemies and friends equally, but may change his mind later this week or whether a full-scale trade war is really about to break out. The Chandler said the US had also launched a new investigation into US imports of cars and auto parts on the grounds of national security, which could mean more bad news.
Analysts, on the other hand, are divided about the future of the dollar
Growing fears of a full-scale trade war could put pressure on the dollar, and tariffs imposed by the US on its trading partners could weaken the currencies of those countries, which would actually strengthen the dollar;
Daragh Maher, head of US foreign exchange strategy at HSBC, said there could be an escalation of tit-for-tat retaliation in the coming week and that US-China trade relations would also be the focus when the US announced new details of tariffs and investment restrictions on China. All of this points to a safe haven environment, which would be good for the yen and the dollar, as well as a challenge for trade-sensitive currencies such as the Australian dollar;
Brad Bechtel, managing director of Jefferies's foreign exchange division, believes the dollar will continue to strengthen, but as political turmoil in Europe eases, the US bond yield curve flattens again, market sentiment becomes positive again and European data stabilise. The dollar may have hit the top for the time being.
Greg Gibbs, an analyst at (Amplifying Global FX Capital Pty Ltd), a global foreign exchange capital company, points out that the dollar index has retreated after a strong rally and investors have withdrawn from emerging and high-risk markets this year. Short-term traders have been bullish on the dollar, and it could take months even if a trade war eventually breaks out or Italy's new leaders threaten to break the euro; At the same time, global growth indicators remain strong, even if they fall back from their highs at the start of the year.
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