Donald Trump increases pressure on China and threatens to raise rates to 25%

Trump threatened with a 10 percent rate, but now plans a 25 percent rate, the US newspaper said. Photo: Saul Loeb / AFP
TOPSHOT - US President Donald Trump speaks during a campaign rally at the Florida State Fairgrounds Expo Hall in Tampa, Florida, on July 31, 2018. / AFP PHOTO / SAUL LOEB

In a new chapter of the tension between the two countries, Trump indicates that it can increase tax rate on $ 200 billion in Chinese products; Brazilian government and private sector representatives see a threat with.

WASHINGTON (Reuters) – US President Donald Trump wants to increase import tariffs of over $ 200 billion on Chinese products from 10 percent to 25 percent . US Trade Representative Robert Lighthizer said on Monday that Trump had ordered his team to study an increase in the rate proposed in June in response to the decision of China to retaliate against the US after tariffs applied by Washington on Chinese products.

“The Trump government continues to call on China to stop its unfair practices, open its market and engage in real market competition,” Lighthizer said in a statement.

British consultancy Capital Economics projects that if all countries adopt import tariffs at the Trump level of 25%, world GDP would decline by 3.0%.

The new threat is seen with concern by the Brazilian government and private sector. Although in theory this may increase Brazil’s exports to China in products such as soybeans, the understanding is that everyone will lose in the medium and long term, with the economic slowdown, the weakening of the international trading system and increased insecurity legal basis. In addition, the industry fears a diversion to other markets, including Brazil, of the industrial products that China now sells to the United States.

“A trade war turns out to be bad for everyone involved. Nobody wins. It loses global trade. We can have eventual gains, but that in the long run may not be sustainable, “Minister of Industry, Foreign Trade and Services, Marcos Jorge, told the State.

Trade data released on Wednesday show that the volume of soybeans shipped to China increased by 44% in July, compared to July last year, reaching a total of 8 million tonnes. “It is too early to say, but this move may be an indication that Brazilian soybeans may now be increasing their share of the Chinese market,” the minister said. “However, it is important to emphasize that, in general, there are still no statistical impacts on Brazilian exports and imports, nor are there any reports of impact felt by the sectors.”

The rise in sales of soybeans to China is not a reason for euphoria because, in the understanding of the technical area, grain produced by the US that used to go to China may “flood” the world market and cause a fall in international prices, the Brazilian exports. In addition, it is assessed in the technical area of ​​government that the episodic increase in grain shipments does not offset the damage of protectionism in world trade.

For the industrial sector, the risk posed by Trump’s threat is trade diversion. “The great fear is China wanting to put its production in other countries,” said Carlos Abijaodi, Director of Industrial Development of the National Confederation of Industry (CNI). “If the surcharge is even applied, I think there will be a large trade diversion, which will be a problem for our industry.”

According to Welber Barral, former Secretary of Foreign Trade of the Ministry of Development, the escalation of the commercial war could result in an increase in the cost of financing companies, especially in emerging countries such as Brazil. “The clash causes insecurity and greater risk in foreign trade, which means more expensive financing for all who export. The cost of financing is already more expensive in emerging countries, which may suffer even more. ”

The unilateral application of import restrictions violates World Trade Organization (WTO) standards. “It’s too bad because it takes away the power of an entity that dictates the rules of world trade,” Abijaodi said.

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  277. Hiya! I know this is kinda off topic however I’d figured I’d ask.
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