As Trump embraces more tariffs, US business readies public fight

Hannah Rogers
September 17, 2018

Last week, Trump threatened even more tariffs on Chinese items - duties on another $267 worth of goods, which when combined with the others would cover virtually all the products that China sends to the United States.

Markets fear any fresh US duties on Chinese imports will mark a major escalation in the trade dispute between the world's two economic giants, potentially causing significant drag on global business investment, trade and growth.

Chinese tech stocks jumped Thursday in USA trade after China welcomed an invitation from the USA to restart trade talks before President Donald Trump hits $US200 billion worth of Chinese goods with tariffs.

"We have indeed received an invitation from the USA side".

The head of the White House Economic Council, Larry Kudlow, told USA television on Wednesday that the Trump administration has sent a letter to Beijing in response to China's call for a resumption of trade talks with Washington.

Another business group, the U.S.

"Investors in general are too predisposed to react too positively to any signs of improvement in the situation", said Kristina Hooper, chief global market strategist at Invesco in NY.

Companies in the tech and consumer discretionary sectors have begun sounding alarm bells. China, on the other hand, has denied allegations that it has forced USA companies to transfer technology.

In part because of trade issues, shares of tech companies have gotten off to a rocky start in September.

Among the first to be affected by Trump’s tariffs are vape devices made in China
Among the first to be affected by Trump’s tariffs are vape devices made in China

The invitation, first reported by the Wall Street Journal, comes amid a swelling chorus of opposition to tariffs from Western business circles.

MSCI's 47-country world index .MIWD00000PUS rose for a fourth straight day of gains, adding 0.58 percent. It said the conflict is "causing significant disruptions to global supply chains". Inventory pile-ups have already pushed down pricing in the semiconductor industry.

China's A-shares shot up 1.2% on hopes for reduced trade tension, but the excitement did not last long, and the index's gain was nearly erased, leaving it up only 0.1%. Those that compete on price, such as Walmart, will likely have to absorb the cost of levies, which will cut into their margins. The company also said new Apple Watches will have larger screens and new health-monitoring features.

Invesco's Hooper pointed to washing machines as an example. Prices would rise for a broad variety of consumer products, including electronics, clothing and appliances.

Already, a six-day public hearing on tariffs held in late August saw representatives from a broad cross-section of U.S. businesses and industrial groups voicing their strong opposition against additional duties on Chinese imports, a move that they said would harm American consumers, workers and companies. The list of targeted items in the next round of tariffs excludes cell phones, for instance.

As indicated in a statement, the action will focus on telling the stories of businesses, farmers, families and workers affected by tariffs, for which they will hold public events, calls to Congress and administration, work on social media and digital advertising.

But further signs of escalation in the U.S.

The groups, which are calling the campaign the largest bipartisan advocacy effort against the duties, illustrates how broadly the impact of the trade war will be felt, said David French, senior vice president of government relations at the National Retail Federation.

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