Trump Trade War - Consumers are a casualty on both sides

Clay Curtis
May 21, 2019

US officials had previously said that China had given ground on some core "structural" issues, including USA demands for improving intellectual property protections, ending forced technology transfers and increased access to China's markets.

The tough talk capped a week that saw Beijing unveil fresh retaliatory tariffs, USA officials accuse China of backtracking on promises made during months of talks and the Trump administration level a potentially crippling blow against one of China's biggest and most successful companies.

'Huawei will seek remedies immediately and find a resolution to this matter, ' the company said in a statement.

"From my perspective, if there is no new substantive action taken by the United States (to address Chinese concerns), then even if they come to talk it will be fruitless".

On Friday, China's government said that it will work to counteract the effects of more US tariffs and keep the economy in a "reasonable range".

In response, the Chinese Foreign Ministry spokesman Lu Kang addressed the media earlier on Monday, stating that Trump didn't know what he was talking about and the U.S. seems to have had "extravagant expectations".

Huawei's Hisilicon unit, which purchases USA semiconductors for its parent, has been secretly developing back-up products for years in case Huawei was one day unable to obtain the advanced chips and technology it buys from the United States, its president told staff in a letter on Friday.

The official China Daily newspaper said in an editorial that the USA government had "revealed all its ugliness" in the restrictions on Huawei.

"But China will not take it and neither will Huawei". More is being considered by the Trump administration.

"Indeed, this is an important moment, but not an existential, live-or-die moment", the official said.

Jokic reprimands himself for Nuggets' Game 7 misfortune
Lillard and McCollum have combined to score 51.9 points per game this series, but haven't shot the ball particularly well. Lillard said it was just the spark the Blazers needed to complete the comeback from a 17-point first-half hole.

Rubio added that for Huawei there are 'real questions now about how they can survive this'. You are no longer a Third-World country. As a result, shares of European semiconductor companies have fallen, dragging down European stock markets with them.

Chad Hart, a crop markets economist at Iowa State University, said the mere announcement of the trade aid will shape farmers' planting decisions, even if the administration doesn't provide details of its plan or payment rates soon.

Analog Devices and Finisar Corp was down about 2.5% while Skyworks Solutions shed 4.8%, Qorvo was down 5.9%, laser sensor maker Lumentum Holdings fell 9%, and memory chipmaker Micron Technology lost 2.7%.

Although Trump has generally defended his moves to hike US tariffs on trading partners and said there was no reason why American consumers would pay the costs, there are growing signs that is exactly what will happen.

Meanwhile, the Walmart Inc.'s CFO, Brett Briggs said in an interview with a press agency that the company had been seeking ways to ease the pain by obtaining products from other countries, however, he also added that it was impossible to reform cost structures overnight.

The 10 per cent tariffs from last September levied on US$200 billion worth of Chinese imports entering the United States have been increased to 25 per cent this month.

USA businesses have reportedly been voicing concerns against President Donald Trump's intensifying trade war with China, with major retailers such as Walmart complaining that tariffs are forcing them to hike prices on consumer goods for Americans.

President Donald Trump said he is "very happy" with the trade war and that China will not become the world's top superpower under his watch.

The United States and Canada also announced on Friday a deal to remove tariffs on Canadian steel and aluminium in exchange for new curbs to keep dumped metals from China and other nations out of the U.S. market.

'There's other things they can do, and M&A would certainly be one thing, ' said Stacy Rasgon, an analyst with Bernstein. The post noted that the United States is talking again about coming back to the negotiating table and about a meeting of the two countries' leaders at the G20 Summit in Osaka next month, it said.

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