U.S. to analyze higher tariff on $200 billion of Chinese goods


The Chinese government said Friday that it would impose duties of 25%, 20%, 10% and 5% on the products if the Trump administration follows through on threats to tax $200 billion of Chinese goods.

The list, unveiled on July 10, hits American consumers harder than previous rounds, with targeted goods ranging from Chinese tilapia fish and dog food to furniture, lighting products, printed circuit boards and building materials.

The GCC, an innocent bystander, will eventually feel the weight of these tariffs.

The move, which is not finalized and could change, according to the source, comes as the United States and China remain locked in a trade war.

Foreign ministers of ASEAN countries appreciated China's support in building ASEAN community as well as the Belt and Road Initiative for boosting regional interconnection and common development, and expressed the hope that both sides will continue to enhance cooperation in trade and economy, innovation and tourism.

With such figures, it's only logical that Trump's new tariffs will have drastic repercussions on GCC markets.

London Metal Exchange copper futures have been trending lower since reaching their peak for this year so far in early June, closing at $6,172 a tonne on Wednesday. Beijing responded to news reports on Tuesday about the planned tariff increase by cautioning the USA against "blackmailing and pressuring" and it vowed to strike back at every escalation.

Beijing said it would be forced to take countermeasures to defend Chinese interests, free trade and the worldwide order.

China has announced retaliatory tariffs on $US60 billion ($81b) worth of U.S. goods ranging from liquefied natural gas (LNG) to some aircraft and warned of further measures, signalling it will not back down in a protracted trade war with Washington. That particular set of tariffs has not yet taken effect. According to the EIA, gasoline demand dipped by 40,000 bpd in May, year-on-year.

But Fred Bergsten, founding director of the Peterson Institute for International Economics, told CNBC that China would be able to absorb blows more easily than Washington. That means stuff that you need as raw material to make other products - so it could have a knock-on effect on many other goods too.

A spokeswoman for the U.S. Trade Representative's Office declined to comment on the proposed tariff rate increase or on whether any changes would alter the deadlines laid out for comment period before implementation.

Comparative advantage is the ability of a country to carry out a particular economic activity more efficiently than another country.

What does all this mean for the GCC?

Retaliatory tariffs were necessary, China says, to "defend the dignity of the country and interests of its people" as well as "the mutual interest of all the countries in the world".

Thus, keeping an eye on China's imports of major commodities in coming months will be key to working out just how quickly the trade dispute is filtering through to the real economy, and determining if the phoney trade war has become a real one.