Here It Comes: China About To Launch "Tens Of Billions" More In Tariffs

This morning the market has been on edge over, and traders are obssessed with just one question: how will China retaliate to Trump's trade war and tariffs... further. After all, the initial response of a modest 15-25% tariff on $3 billion in 128, mostly agricultural, products, seemed laughably small and appeared to be more of a warning shot than a real response to Trump's $50BN in Section 301 tariffs.

One answer was revealed moments ago when as we reported that China’s ambassador to the US Cui Tiankai did not rule out the possibility of scaling back purchases of Treasuries in response to Trump's tariffs.

“We are looking at all options,” he said, when asked whether China would consider reduced purchases of Treasuries. “That’s why we believe any unilateral and protectionist move would hurt everybody, including the United States itself. It would certainly hurt the daily life of American middle-class people, and the American companies, and the financial markets.”

But the more likely reaction is that China will simply escalate with a "brute force" tit-for-tat retaliation, and as Citi notes, the editor-in-chief of the state-controlled Chinese newspaper Global Times, Hu Xijin, confirmed precisely that when he tweeted: "I learned that Chinese govt is determined to strike back."

More importantly, he explained the confusion over the "disproportionate" $3 billion response, noting that "Friday's plan to impose $3b tariffs is simply to retaliate to tariffs on steel and aluminum products", i.e. a response to the previous, Section 232 round of tariffs, and has nothing to do with the latest round of $50 billion in Section 301 tariffs.

Instead, Hu warns that "China's retaliation lists against the 301 investigation will target US products worth $ tens of billions. It is in the making."

Or, in other words, China's real retaliation - one which is guaranteed to infuriate Trump with its proportionality and lead to further tit-for-tat responses - is about to hit.

As a reminder, here is a list of the main US exports to China, which - if this warning is accurate - are about to be crushed.

Comments

Looney Fri, 03/23/2018 - 12:27 Permalink

 

Yesterday, during the signing of the China Tariffs, I noticed the former NSA chief, Keith Alexander, amongst the people behind the President.

WTF was THAT cunt doing there?   ;-)

Looney

I am Groot Rapunzal Fri, 03/23/2018 - 16:56 Permalink

You nailed it ! Not one fucking post here mentions the damn Fed pumping trillions into this failed abortion of an economy. There won't be a correction. There will be a total collapse. We have more subprime loans, more failed auto and college loans than 2008. Companies are selling stock way more than their company's actual worth. Shooting wars and trade wars are nothing more than sideshows designed to distract from the real problem. When the US loses the strength of sanctions and the Petrodollar, the real shooting will begin.

In reply to by Rapunzal

Theosebes Goodfellow Fish Gone Bad Fri, 03/23/2018 - 20:05 Permalink

~"Must-stop-the-petroYuan-at...any...cost. China gets slapped on the 26th for being a little bitch."~

This is not about the petro-yuan. And I'd be very careful about counting chickens re bitch-slapping China. Even money bet is that Russia, Iran and Venezuela, (especially Venezuela), will announce next week that they will only accept payment for their oil in gold-backed yuan. The world is going to be a very interesting place next week.

In reply to by Fish Gone Bad

philipat Theosebes Goodfellow Fri, 03/23/2018 - 20:41 Permalink

The CNY oil futures contract IS significant because it will put non-CNY vendors at a further disadvantage, specifically Saudi Arabia. Their response will be the critical step.

But there has been so much disinformation about the "Gold backed" oil contract. It is NOT a Gold-backed contract, at least not backed by China's Gold. The facts are that the new oil contract will trade on the Shanghai INTERNATIONAL exchange for settlement in CNY. Should the recipients of the CNY not need CNY (And increasingly they will) they can buy physical Gold on the same International exchange. But they can already do that if they wish by converting whatever currency they want and buying physical Gold. And the Gold purchased is NOT Chinese-owned Gold but Internationally-owned Gold traded in Shanghai on the International exchange in Shanghai Free Trade(Remember that?) zone. China's Gold (Other than Official Monetary Gold which is generally purchased in London and other Gold centres using USD so as to recycle unwanted excess USD reserves) trades on the SGE, which is a purely domestic market and Gold traded there is NOT for export. China is building its Gold reserves and isn't going to allow any reversal of that trend. Indeed, unlike in the disingenuous West, the Chinese Government actually recommends its citizens should buy Gold as a wealth protection mechanism.

So it is wrong to suggest that CHINA will back the oil contract with Gold or "Oil for Gold" as it is often described. If China is able to back its oil contract with Other Peoples Gold... more power to them!!

In reply to by Theosebes Goodfellow

Oldwood Econogeek Fri, 03/23/2018 - 18:25 Permalink

Progressives win by insisting we not fight back. Years of ill-advised wars have emboldened their stance on NOT non-interventionism, but non-defense, the gutting and diminishing of our military and then suggesting we can't AFFORD to fight back. 

This is their premise on trade. EVERYONE agrees that China is fucking us and yet we hear politicians lined up screaming in fear that their stock portfolios might suffer, NOT from a trade war, but for fighting back. They are ANTI war and PRO surrender. $500 billion a year in trade deficits and we are supposed to ignore that this enables a debt HELD by those who would see us go Venezuelan.

In reply to by Econogeek

BigJim Oldwood Fri, 03/23/2018 - 20:06 Permalink

the gutting and diminishing of our military

Christ, you're an idiot. "Gutting"? We spend more than the rest of the world combined. Just the amount Trump increased the defence budget is more than Russia spends on defence.

How many fucking times, you moron, do you need to have the difference between "pacifism" - which is never using force, even in retaliation - and "non-intervention" - which means not starting fights?

Are you genuinely that fucking stupid?

In reply to by Oldwood

Oldwood BigJim Fri, 03/23/2018 - 21:55 Permalink

Thanks BigJim for your thoughtful response, you obnoxious cunt. Apparently you are too smart to understand that dollars spent does NOT translate into a functional military. Simply look at the decline in numbers of aircraft and ships and divisions available to combat. There is massive waste in military spending, but that DOES NOT mean we have adequate forces or equipment. Russia is far more efficient with their military spending, so in your simple mind, because of our waste and corruption in MIC, we should simply fucking SURRRENDER. 

And you really DON'T need to explain the difference between pacifism and non-interventionism, but you really DO need to understand that there is only one way to preserve peace and that is with strength. Prepetuating the theme of ill-equiped and unprepared, not to mention corrupt millitary, as well as failed military adventures around the world, is only making us appear weaker. A weak America after years of misguided interventionist policies will be our end.

In reply to by BigJim

Dindu Nuffins Oldwood Sat, 03/24/2018 - 02:12 Permalink

It's fight club. Can't take it too personally.

He's right about not needing much of a military to defend two very defensible coastlines. The American army should return to an ad-hoc militia and the only standing forces are ICE, who now have machine gun nests at all apropriate locations. No more foreign wars, and no one invades.

In reply to by Oldwood

hootowl BigJim Sat, 03/24/2018 - 13:21 Permalink

BigJim has fallen prey to his brain-freezing excessive testosterone imbalance.  Maybe BigJim should find a snow bank somewhere, drop his drawers and sit in the snowbank until June and regain some self-control.

 

China cannot beat us in a trade war!!!  We are stupidly funding their economic and military corrupt cadres of communist elites.  China knows that, even if Corporate America is rife with selfish concern for its own portfolios.  Let the Chinese flood the Muscum-infested European morons with plastic toys and furniture and pump a few trillion yuan into Africa and the ME and watch it all sink and disappear into the abyss.  We all know how dearly the Chinese love and respect the Black Savage and the Peace-loving Muscum.

 

The Chinese already have built huge vacant residential housing complexes to house their military and economic slavemaster overseers and to which to re-locate 200 to 300 million excess male military personnel out of the country to keep the communist cadre in power and to mix and mingle with the diseased, circumsized, Black vaginas of the African bush.  The real need will be alum to tighten the Black bush vaginas to make them work well for the Chinese troops and small size condoms which with the Chinese troops can service the young, tight, poor, Black boys and girls of Africa and protect themselves from the myriad STDs of the African population.......and keep the Chinese peasants conscripted into the military from overpopulating the homeland.

In reply to by BigJim

Sudden Debt JimmyJones Fri, 03/23/2018 - 17:51 Permalink

But the problem for China is that most luxury products that their rich citizens consumer come from Europe and they don't want to piss of them because otherwise Europe would also react.

 

nop, the biggest imports from America are food for the people and if they impose tarifs there, salaries need to go up and Chinese salaries are already getting to high.

In reply to by JimmyJones

earleflorida Sudden Debt Fri, 03/23/2018 - 22:55 Permalink

Russia can help [big tyme],...as can Canada if Trump goes after Trudeau via NAFTA

Ref:    http://www.fao.org/faostat/en/#data/QC

Plug in any country and all are interconnected "Tariffs' don't work.

If China is lacking a certain crop they simply go to Brazil, Venezuela, or even Australia the behemoth of 'SoyBean' great site

Note: During the period in America when the South's cotton crop basically supported America's commerce (~1835- 1860) and America decided to place tariffs on American cotton the country soon tanked post civil war.

Why?

Britain had anticipated the USA idiotic tariffs, being the greatest/wealthiest commerce/ import economy of the worlds raw (all incl) materials, and began to grow their own cotton (their big tyme import) in Egypt's Nile/Delta Valley, Turkey, and British India all under the thumb of british colonialization. This fucked-up America's western manufacturing/industry base, and the North-East Shipping Commerce (all remained idle for years). New England felt the worse of what was to become a many, 'Bad few years'.

{WHY},... just we can't all get along ;)

In reply to by Sudden Debt

DemandSider earleflorida Sat, 03/24/2018 - 08:23 Permalink

Every country, especially Britain, has wisely used tariffs to grow their manufacturing. The highly nationalist PRC, with it's technology transfer requirements, tariffs, domestic government procurement rules, and CCP, non profit, ownership of manufacturing inputs, has taken protectionism to a level the world has never seen. Unfortunately, true to form, Wall Street is on The PRC's side.

In reply to by earleflorida

GUS100CORRINA Four Star Fri, 03/23/2018 - 15:41 Permalink

Here It Comes: China About To Launch "Tens Of Billions" More In Tariffs

My response: In 2017, America's trade deficit with China was a whopping 375 BILLION dollars!!!! President TRUMP and the TRUMP administration simply want to get this number down to a more reasonable number like a 100 Billion or so because the 375 BILLION dollar figure is unsustainable.

Anyone look at the CHINESE markets today? They are down worse than the USA so CHINA may blink first. It wouldn't take a whole lot to tip the CHINESE markets over. Just go read articles from Kyle Bass if you don't believe me.

While I believe this is gonna hurt in the short run, in the long run we need fair and reciprocal trade, not the lopsided trade deals we have seen for the last 50 years.

In reply to by Four Star