EU President Warns China, Russia, U.S. of Starting Global Trade Wars

EU President Warns China, Russia, U.S. of Starting Global Trade Wars

Washington and Beijing imposed tit-for-tat tariffs on $34 billion of goods this month and the United States raised the stakes last week by threatening to impose measures on another $200 billion worth of goods, prompting China to vow retaliation. The list targets products worth a total of $200 billion, ranging from an expansive range of seafood and vegetables to stones, metals and plywood.

In taxing imported steel and aluminum from some countries in March and others in June, President Donald Trump deployed a little-used weapon in American trade policy: Under the Trade Expansion Act of 1962, presidents are empowered to impose unlimited tariffs on imports that the Commerce Department asserts are threats to America's national security.

Forecasters say if threatened tariff hikes by both sides are fully carried out, that could cut China's 2019 growth by up to 0.3 percentage points.

The European Union on Monday urged the United States, China and Russian Federation to work together to ease worsening global trade tensions, warning that they could otherwise spiral into "conflict and chaos".

Beijing has said it would retaliate for that, and on Monday the Commerce Ministry said it had added the $200 billion tariff threat to existing WTO complaints which it has lodged against Washington.

ANZ analysts said in a note Monday that the Fed's report "yielded few surprises", but noted that trade tensions continue to weigh on commodity markets and USA consumer confidence.

Turkey's retaliatory tariffs, effective June 21, 2018, impose 4 to 70 per cent additional duties on Dollars 1.8 billion in United States imports (based on 2017 trade values).

"But the decision by Canada and the European Union to implement retaliatory tariffs before the WTO has ruled against this application or against the legislation itself on Section 232 is legally speaking premature".

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Speculation that US President Donald Trump could seek increased production from oil cartel OPEC and tap into the Strategic Petroleum Reserves to push down gasoline prices, sent oil plummeting.

China called on the WTO to initiate an investigation of violations of global trade law. In September when this list could be finalised, the United States would have begun its election campaign season for the off-year elections. The US exports only $130 billion or so of goods to China, while its imports exceed $500 billion.

What Canada and the European Union are arguing is that the USA never compensated for using a safeguard, Busch said. There are substantial constraints on Chinese power and influence.

That means headwinds not just for China's economy, but for the world's too.

It's the spillover effect that most worries economists, given China's central role in a regional and global supply chain that feeds America's economy with goods and services.

But what has caused alarm has been China's drive to achieve technological dominance? It called on global leaders to work on "resisting protectionism and unilateralism and making globalization more open, balanced, inclusive and beneficial to all". China has already created an ecosystem of R&D facilities, industries and ancillaries to push for its dream of becoming the global leader in AI, robotics, biopharma, electrical vehicles and so on. Foreign companies often must partner with local firms in order to access the Chinese market.

"I'm saying they haven't treated us fairly". But seeking to turn the clock back by blowing up the global trading system, restricting investments by Chinese companies or blocking Chinese nationals from the USA educational system could well be the equivalent of cutting your nose to spite the face.

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