Published: Fri, September 14, 2018
Markets | By Otis Pena

Robert Scott, economist, says fears over Donald Trump tariffs overblown

Robert Scott, economist, says fears over Donald Trump tariffs overblown

Talk might be cheap, but it is certainly better than another round of multi-billion-dollar tit-for-tat tariffs between the United States and China.

"We are under no pressure to make a deal with China, they are under pressure to make a deal with us", Trump tweeted.

U.S. companies in China say they are already feeling the pain from the trade war.

Mr Kudlow earlier told reporters outside the White House that communications with Beijing had "picked up a notch".

Trump said there was more pressure on China to make a deal, pointing to their shrinking economy.

China welcomed the offer of talks and said the two countries were discussing the details, according to reports. "And so, Secretary Mnuchin, who is the team leader with China, has apparently issued an invitation".

China's stock market slumped to a 31 month low on Wednesday, Sept. 12.

The possibility of new talks comes as China is wary of the "very painful" impact of additional U.S. tariffs given its economic slowdown, with its gross domestic product at the lower end of its growth range for the past three years.

"If nearly a half of American companies anticipate a strong negative impact from the next round of US tariffs, then the USA administration will be hurting the companies it should be helping", he said.

The possible resumption of negotiations sent Asian markets rallying with Hong Kong surging 2.5 per cent - having fallen for six straight days and into a bear market - and Shanghai more than one per cent higher. President Donald Trump said last week that new tariffs on $200 billion of Chinese goods could go into effect "very soon" and warned that an even bigger raft of measures is in the works.

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So far, the United States and China have hit $50 billion worth of each other's goods with tariffs in a dispute over US demands that China make sweeping economic policy changes, including ending joint venture and technology transfer policies, rolling back industrial subsidy programs and better protecting American intellectual property. A meeting among Cabinet-level officials could ease market worries over the escalating tariff war that threatens to engulf all trade between the world's two largest economies and raise costs for companies and consumers.

"I think the talks have the potential to be successful, but it depends on the approach that both countries take", she said.

But he cautioned: "I guarantee nothing". Midlevel U.S. and Chinese officials met on August 22 and 23 with no agreements.

More than 60 per cent of USA companies polled said the U.S. tariffs were already affecting their business operations, while a similar percentage said Chinese duties on United States goods were having an impact on business. "AmCham China and AmCham Shanghai urge both governments to return to the negotiating table".

"There seem to be domestic political pressures that are working against the perception of USA companies receiving benefits" during trade disputes, Parker told the South China Morning Post.

A series of companies want President Trump to know that tariffs are hurting USA industries.

China's Commerce Ministry said both sides would want to avoid escalation.

Yu Zhi, an global trade specialist at the Shanghai University of Finance and Economics, urged Beijing to resolve Washington's fundamental and long-standing problems with its trade practices in any negotiations that take place to avoid further expanding the trade war.

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

AmCham's survey results come a day after more than 60 USA industry groups launched a coalition called Americans For Free Trade, which aims to halt the White House's proposed tariffs.

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