Trade war threats get real as US and China impose tariffs

Donald Trump has turned his threats of a trade war into reality. (Photo: AP)

 

US President Donald Trump fired the biggest shot yet in the global trade war by imposing tariffs on $US34 billion ($46 billion) of Chinese imports. China immediately said it would be forced to retaliate.

The duties on Chinese goods started at 12:01 am Friday in Washington (2:01 pm AEST), which was just after midday in China. Another $US16 billion of goods could follow in two weeks, Trump earlier told reporters, before suggesting the final total could eventually reach $US550 billion, a figure that exceeds all of US goods imports from China in 2017.

US customs officials will begin collecting an additional 25 per cent tariff on imports from China of goods ranging from farming plows to semiconductors and airplane parts. China’s officials have previously said they would respond by imposing higher levies on goods ranging from American soybeans to pork, which may in turn prompt Trump to raise trade barriers even higher.

Europe Renews Tariffs On Chinese Steel Pipes As High As 72%

As the world watches breathlessly if Trump will follow through with his threat to slap steel and aluminum import tariffs, Europe continues to quietly ratchet up its own trade war with China and nobody seems to mind.

EU ignites Trump War: Brussels to slap trade sanctions on Harleys and Jack Daniels

Iconic US brands such as Jack Daniels and Harley-Davidson will be targeted by EU trade commissioners [Getty]

 

BRUSSELS is gearing up for a bitter trade war with US and has pledged to fight fire with fire if Washington carries out its threat to introduce import barriers to steel and aluminium products from Europe.

European Union trade officials have warned such a move would result in counter-tarrifs being slapped on exports from the US within days.

They said iconic US products ranging from Harley-Davidson motorcycles to Jack Daniels whiskey would be targeted in any retaliatory strikes and that preparations for such a confrontation were in full swing.

U.S. Is A Net Exporter Of Natural Gas For First Time In 59 Years

Source: EIA

 

Exports outweigh imports in February, April, May: EIA

The U.S. has been a net exporter of natural gas for three of the first five months of 2017, according to a note released by the EIA. This is historically significant, as February, April and May are so far, the only months in which the U.S has been a net exporter of natural gas since 1958.

China’s Plan to Subvert the Global Dollar Standard

Regardless of how it all plays out, the U.S. Dollar hegemony is under threat. There is indeed a replacement system ready to go, with America out of the picture. There is an alternative to the Dollar. There is an alternative to SWIFT. There is an alternative to the IMF and the World Bank. America, for all its greatness, is not untouchable.

 

 

If nothing else, the Chinese have a sense of history and destiny. They have had a glorious past, stretching back millennia, and once controlled most of the Asian heartland in the days of Genghis and Kublai Khan. But even then, China was essentially inward-looking, protecting her own cultural values. Trade with Europeans in the centuries following Marco Polo’s visit was mostly at the behest of European travelers, not the Chinese. She exported her art and culture to visitors, and did not import European values.

This was a mistake, implicitly recognized by China’s current leadership. This time, China has embraced Western thinking and technology to further her own progress. The development of the Shanghai Cooperation Organization in recent years is the platform for China in partnership with Russia to embrace the Asian continent through peaceful trade, improving the lives of all the citizens of the many nations who are and will become members. The SCO promises a revolution in the wealth and living standards of over 40% of the world’s population, and associated benefits for its supplier-nations on the other continents.

Next recession will hit during Trump’s first two years

 

When the U.S. sneezes, the world catches cold

A recession in the United States is likely to come within the next two years. It is difficult to determine when a recession will occur based solely on economic activity. Economists argue about the precursors to a recession as a matter of course. I am not making the case that one will happen because I believe I am competent to enter that debate. Rather, I am making the case that a recession is increasingly likely simply by looking at the frequency with which they occur.

The last recession started in 2007 and ended in 2009. The one before that started and ended in 2001. The two previous recessions ran from 1990 to 1991 and from 1981 to 1982. In these cases, the time between the end of one recession and the start of another was about eight years on average. Between 1945 and 1981, recessions were much more frequent, but obviously something has happened to extend the time between them.

Asia emerges as an economic zone

Source: Bloomberg

 

Asian currencies (Korea, Malaysia, Philippines, India, Indonesia, Taiwan and China) are now trading in lockstep with the Japanese yen. In large part this is managed: so many Asian countries compete in the same export markets that their central banks try to keep their currencies aligned with each other.

Trade Deficit in U.S. Widens to Largest in Almost Five Years

 

• Imports rise by most since 2015, outpacing export gains
• Trump administration says data show ‘much work to be done’

The U.S. chalked up its largest trade deficit since March 2012 as a jump in merchandise imports in January exceeded a smaller gain in shipments overseas.

The gap in goods and services trade increased by 9.6 percent to $48.5 billion, matching the median forecast in a Bloomberg survey, Commerce Department figures showed Tuesday. The deterioration in January from the previous month reflected a 2.3 percent gain in imports, the most since March 2015, and a 0.6 percent pickup in exports.

China overtakes US and France to become Germany’s most important trading partner

China became Germany’s most important trading partner as imports and exports rose to €170 billion (GETTY)

 

CHINA for the first time became Germany’s most important trading partner in 2016, overtaking the US and France.

German imports from and exports to China rose to €170 billion (£143billion) last year, Federal Statistics Office figures reviewed by Reuters showed.

The development is good news for the German government, which has made it a goal to safeguard global free trade after US President Donald Trump threatened to impose tariffs on imports and his top adviser on trade accused Germany of exploiting a weak euro to boost exports.

Trade With Japan Collapses: Exports Decline 7th Month, Imports Plunge Most Since 2009

 

Abenomics was back in the spotlight tonight. Global trade with Japan has collapsed. Exports are down and imports are down even more. The result is an unexpected rise in Japan’s trade surplus, yet another failure of abenomics.

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The Markit Japanese PMI shows Output falls at fastest rate in over two years, underpinned by a sharp
drop in new orders.

The Trans-Pacific Partnership: Death of Western Sovereignty

(TRUNEWS) On February 4, the Trans-Pacific Partnership (TPP) is set for formal signature in New Zealand.

The TPP is a global version of the North American Free Trade Agreement (NAFTA) and the General Agreement on Tariffs and Trade (GATT), which has been negotiated in secret for the last seven years and would place centralized regulation on 40 percent of the world’s economy.

NAFTA and GATT had a catastrophic effect on U.S. business competitiveness, and domestic export values, upon implementation in the 90’s, a trend the TPP is likely to follow.

We Have Hit Keynesian Nirvana: A Third Of All Containers Shipped From Long Beach Port Are Empty

In the past several months, it has been virtually impossible to make any sense of the conflicting trends involving US and global trade. On one hand, there is global trade, which as we have covered since the spring, has been in a state of consistent decline. Some example of this:

• World Trade Slumps By Most Since Financial Crisis
• Something Just Snapped: Container Freight Rates From Asia To Europe Crash 23% In One Week
• Global Trade In Freefall: Container Freight Rates From Asia To Europe Crash 60% In Three Weeks
• South Korea Exports Crash Most Since 2009

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Where things get more complicated, however, is when looking at the US. Here, macro data throughout the summer had suggested more or less smooth sailing in the trade space, and it was only a week ago that the facade started to crack, following the ugly advance trade report, when as we reported there was a “16% Surge In August Trade Deficit; Imports Jump As Exports Drop.”

Monday’s EU Summit & Trioka’s Misguided View of Greece

The European Union is indeed on the ropes and their arrogance as lawyers cannot see the reality of economics. They view the world only through the power of their pen to write a law and DEMAND under threat of penalty we do as they command. This group of super–heroes lack the comprehension that people will not follow laws that make no sense or go against human nature.

These super–heroes command that everyone shall abide by austerity can only lead to the Grexit and the beginning of a period of unprecedented levels-destruction in Europe along with rising civil unrest across the continent. Anyone who has EVER worked on a foreign exchange desk knows far more about the market flows than they will ever think about with all their law degrees. Based upon the botched job they have mastered so far, the EU will descend into the final destruction phase. The idea that one government would end European wars is producing rising civil unrest and the very finger-pointing that creates war.

The ultimate consequences of this wrong policy from the outset to create a single currency without consolidating the debts of member states, has led to this crisis in the monetary system for the entire world. The consequences will certainly still be felt for many decades to come if not 112 years impacting generations of Europeans. However, the destruction unleashed in Europe will contribute to taking down the United States from its lofty perch and shift the entire new economic age to those nations who were once in the firm grip of Marxism.

Swiss Peg Collapses – The Euro’s Nightmare

On September 6th, 2011 the Swiss National Bank (SNB) was aiming for a substantial and sustained weakening of the Swiss franc after Swiss companies threatened to leave because the rising franc reduced their exports. The SNB would no longer tolerate a EUR/CHF  exchange rate below the minimum rate of CHF 1.20. The SNB set out to enforce this minimum  rate with the utmost determination and it began to buy Euros in unlimited  quantities.

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Socrates has been warning about January for the last year. Here is the forecast array on a daily level and it pinpointed the rise in in volatility for today the 15th with a Panic Cycle and turning point due as well as we can see.

US Sees Huge Energy Opportunity In Europe

If 2015 is anything like 2014 we can expect a wild ride. Oil price volatility – including its downward trend – will linger well into the first and second quarters as global production persists and key conflicts in Eastern Europe and the Middle East show no end. For its part, the United States is better positioned than most – the US is poised to carry the global economy in 2015 with projected GDP growth of 3.1 percent. However, converting this potential into meaningful energy trade and/or soft power is another matter altogether and 2015 offers limited opportunities.