Futures Slide, Erase Overnight Gains As China Announces $16BBN Retaliatory Tariffs

This should hardly be news but sure enough the algos are reacting to headlines that China will unleash its $16 billion 25% retaliatory tariffs on 333 US products on August 23rd.

Tariffs are to be imposed on products including crude oil, coal, diesel, bikes and cars, and medical equipment.

China's MOFCOM says that it is "forced to retaliate" noting that "US tariffs are very unreasonable." and retaliatory tariffs are "to safeguard legitimate rights and interests."

Nasdaq futures are leading the drop for now.

China Official Statement:

The State Council Customs Tariff Commission issued an announcement to impose tariffs on imports of approximately US$16 billion from the United States.

August 8, 2018 Source: Office of the Customs Tariff Commission of the State Council

With the approval of the State Council, the Customs Tariff Commission of the State Council decided to list the tariffs on the US and Canada in the Notice of the Customs Tariff Commission of the State Council on the Tariffs on Imports of US$50 Billion Imports from the US (Announcement of the Taxation Committee [2018] No. 5) After the appropriate adjustment of the second commodity, the tariff of 25% will be imposed from 12:01 on August 23, 2018.

According to the opinions of relevant departments, industry associations and enterprises, in order to protect the interests of domestic consumers and enterprises to the greatest extent, the list of taxable goods has been appropriately adjusted. The specific commodity range is about the State Council Tariff Commission on the origin of about 16 billion in the United States. The Notice of Adding Tariffs on Imports of US Dollars (Announcement of the Taxation Committee [2018] No. 7) shall prevail.

Other matters are still implemented in accordance with the Notice of the Taxation Commission [2018] No. 5.

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Ironically, while trade tensions are being ratcheting up, China’s trade surplus with the U.S. stood at $28.1 billion in July, close to the record-high in June, data released Wednesday showed.

Comments

Juggernaut x2 TxExPat Wed, 08/08/2018 - 09:53 Permalink

Capital flows to where it can be exploited the cheapest- if not to China then it will flow to Vietnam or Myanmar or whatever - so, unless US workers will work for $2.50/hr there won't be factories reopening on every corner like Trump is leading you to believe. The American standard of living is maintained by debt- period.

In reply to by TxExPat

DemandSider Juggernaut x2 Wed, 08/08/2018 - 10:14 Permalink

And technology; and middle class manufacturing; and industry, and the future.

 

The PRC has had the fastest supercomputers, and still sells the most supercomputers, for the last 5 years. However, this year, The Summit supercomputer project in Tennessee just took the lead back for The U.S. Here's what it took to do that:

"Supercomputers like Summit, which cost $200 million in government money to build,..." -NYT

 

We never should have allowed ANY PRC labor value added goods into The U.S. The only way for diverse democracies like The U.S. to compete with The PRC, is to become more like The PRC. Is that what you want?

In reply to by Juggernaut x2

TGF Texas DemandSider Wed, 08/08/2018 - 13:24 Permalink

@ the long term Hedgers

Jesus, are there really this many troll's on this site now? 

Half the comments on this story, sound like they come from someone who's never taken an macro economics class in their entire life, much less quasi experts at economics required to be a successful Trader/Investor!

It's like half the posters on here took crazy pills, and the rest of us have to deal with their verbal diarrhea. 

In reply to by DemandSider

lock-stick Adolfsteinbergovitch Wed, 08/08/2018 - 11:23 Permalink

It's all ONE SICK, PATHETIC SPAMMER!!!

•• Free This (ABOVE, in all his 7th grade glory - JACKASS  as new icon!)

•• roea.rita ("I SUCK DICK ON THE INTERNET FOR LAND ROVERS!")

•• Adolfsteinbergovitch ("I TORMENT THE WOMAN WHO SUCKS DICK!")

•• 07564111 ("I PRETEND I DON'T KNOW ANY OF THEM!")

•• MoreSun (whacked, OH SO WHACKED!!)

 

....and all the while, the pathetic little SPAMMER sits in his leaky, moldy, smelly single wide in Western New York, surrounded by garbage and dirty clothes, trying to find his dick amidst rolls of fat, talking to his ACTION FIGURES and wondering where his life went.

 

It's all ONE SICK, PATHETIC LIDDLE SPAMMER!!!

In reply to by Adolfsteinbergovitch

SummerSausage Wed, 08/08/2018 - 08:13 Permalink

We already know China will have to start buying US soybeans again in a few weeks.  

Their stock market is down 25%.

China needs the US market. The US market DOES NOT NEED China - no matter how the leftist media tries to spin reality.

US imposing tariffs on China imports will add less than 3/10 of 1% to US $20 trillion GDP.  China adding tariffs to what they import from the US will further weaken their economy and inability to feed their people.

US holds the cards. 

DemandSider SummerSausage Wed, 08/08/2018 - 09:28 Permalink

It's a major miracle for Trump that he's still doing as well as he is doing in farm states. You could see The PRC's agriculture tariffs coming a mile away. I really hope these states can hold out long enough for the tariffs to work. Trump has a very tricky coalition of farm and rust belt supporters who will be tested bigly by his well past due return volley in the decades old protectionist trade war by The PRC and their Wall Street business partners.

In reply to by SummerSausage

hotrod Wed, 08/08/2018 - 08:31 Permalink

But do you really want to export to a country printing up yearly a trillion of their own currency to stay solvent?  At some point getting FIAT for your labor and resources has to stop anyway. 

Do you want dollars for your OIL,  I wouldn't. I am surprised any country accepts Yen at this point and dollars aint worth much more.  interest on them is nothing and the USA has to artificially adjust all metrics to keep lipstick on the pig.  How about that extra 1 trillion in GDP the USA conjured up.