US-China Trade War Escalates
(20 June 2018 - China) US President Donald Trump instructed the US Trade Representative to find Chinese goods worth another $US200 billion ($268.7 billion) for new trading tariffs.
The US has long maintained that Beijing has kept its currency artificially low in a bid to boost the competitiveness of its manufacturing sector. China’s central bank governor Yi Gang stated that that the China’s central bank (PBoC) was prepared for “external shocks”. “We will prepare relevant policy tools in a forward-looking manner, use a combination of monetary policy tools, maintain liquidity at an appropriate and stable level and make sure the structural de-leveraging progresses with the right strength and at the right pace,”.
China’s finance ministry announced last week $34 billion of retaliatory tariffs on US products such as SUVs, soybeans, beef and bourbon whiskey starting July. US President Donald Trump subsequently tasked his administration with identifying Chinese goods worth $200 billion on which he can apply a 10 percent tariff. Soybean prices in particular have been driven well below cost for US farmers as a result of a 25 percent increase in tariffs on Chinese imports, representing the top agricultural US export to China. In retaliation for tariffs imposed by the US on Chinese goods, China has threatened to increase tariffs on US cars from 15 to 40 percent.
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