US trade war targets: The list lengthens

US President Donald Trump and China’s President Xi Jinping shake hands ahead of their bilateral meeting during the G20 leaders summit in Osaka, Japan, June 29, 2019. ― Reuters pic
US President Donald Trump and China’s President Xi Jinping shake hands ahead of their bilateral meeting during the G20 leaders summit in Osaka, Japan, June 29, 2019. ― Reuters pic

PARIS, Dec 3 — Donald Trump’s high-profile trade war with China may be the biggest threat to the world economy among current trade disputes waged or threatened by the US President, but the list of Washington’s targets is lengthening.

Chinese chronicle

The bedrock of Trump’s trade policy disputes is the relation with China.

The world’s two biggest economies have spent two years levying trade tariffs on each other along with threats of more tariffs.

Washington has already hit more than half of the roughly US$500 billion (RM2.1 trillion) in annual US imports from China with increased duties, while Beijing has done the same to around US$110 billion worth of US goods.

Trump wants the Chinese to halt massive state industrial subsidies, to curtail its policy of forcing foreign companies to transfer technology to Chinese partners, and to stop alleged theft of intellectual property.

The next key date is December 15, when new US tariffs could take effect.

Meanwhile, dangled prospects of a modest trade deal that could mark a truce and which have kept financial markets on tenterhooks appeared to be in off-again mode today.

Trump told a press conference in London: “I have no deadline. In some ways I like the idea of waiting until after the election for the China deal,” a reference to his bid for a second term in November 2020.

France and European Union

The EU has long been a US ally, but Trump regularly threatens to slap tariffs on European goods.

German automakers have been spared so far, but French products are now on the front line.

That is because France passed a law taxing digital giants like Google, Apple, Facebook and Amazon on revenues earned inside the country.

Yesterday, US Trade Representative Robert Lighthizer said Washington might impose tariffs of up to 100 per cent on US$2.4 billion in French goods like sparkling wine, yoghurt and Roquefort cheese in retaliation.

French Finance Minister Bruno Le Maire has vowed that Paris will only give up the digital tax if a global one being mulled by the Organisation for Economic Co-operation and Development replaces it.

He said today that “if there are new American tariffs there will be a European response, a strong response”.

An EU spokesman said the bloc would respond “as one” to the US threat.

A separate front involves an ongoing spat over subsidies for Boeing and European planemaker Airbus.

Yesterday, a World Trade Organisation panel found that the EU had failed to remove illegal subsidies to Airbus, reinforcing an earlier WTO decision that allowed the US to retaliate with tariffs on US$7.5 billion in EU exports.

Argentina and Brazil

Trump yesterday said steel and aluminium tariffs would be reinstated on Argentina and Brazil, accusing them of manipulating their currencies and hurting US farmers.

“Brazil and Argentina have been presiding over a massive devaluation of their currencies,” which was hurting American farmers, Trump said on Twitter.

Trump last year announced global tariffs of 25 per cent on steel and 10 per cent on aluminium but later approved exemptions for some countries, including Argentina and Brazil — after they agreed to quotas.

Brazil is the second-largest supplier of steel to the US market behind Canada.

Brazil and Argentina have benefitted from the US trade war with China, as they have stepped in to replace American exports of soybeans and other agricultural goods to the Asian giant.

Canada and Mexico

Following months of tense talks, the United States-Mexico-Canada Agreement (USMCA) took a major step towards replacing the NAFTA trade pact that had ensured free trade in North America for the past quarter century when Mexico ratified the deal in June.

Both the US and Canada have yet to follow suit, and Democratic lawmakers in the US are seeking a number of changes.

Meanwhile, Trump has cast doubt on the agreement by threatening Mexico with tariffs to force the country to stem the flow of migrants to the US.

India

India is another target of Trump’s wrath, with the US halting in June trade advantages that Indian goods had enjoyed.

Washington removed India from a list of countries that received duty-free access for billions of dollars worth of imports after Trump said the US did not receive comparable treatment in return.

The move came on the back of higher US tariffs on Indian steel and aluminium.

India replied with duties on 28 goods from the United States, including almonds and apples. — AFP

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