Asian stocks sink on weak data ahead of US-China tariffs

Gladys Abbott
July 6, 2018

On Friday, Canada struck back at USA steel and aluminum tariffs, vowing to impose punitive measures on $12.6 billion worth of American goods until Washington relents.

Trump's views on tariffs have been a sore subject, even among fellow Republicans who have criticized Trump's imposition of steep tariffs against USA allies. China has threatened to retaliate in kind with its own tariffs on USA agricultural products and other goods.

The Trump tariffs would violate global trade rules, the commission said, adding that European auto imports into the United States do not pose a threat to the American automobile industry.

On Sunday, the Financial Times wrote: "Donald Trump's threat to hit vehicle imports with punitive tariffs risks sparking global retaliation against as much as $300 billion of USA products, Brussels has warned".

The submission said that tariffs on cars and vehicle parts could undermine US auto production by imposing higher costs on USA manufacturers.

US Chamber president Thomas Donohue said: "Tariffs are simply taxes that raise prices for everyone".

But for Murphy and the Chamber of Commerce, threatening companies whose businesses largely rely on exports was not the most constructive strategy in bringing trade to a fair playing field.

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The number of exports that could be hit by retaliatory tariffs among the 10 most vulnerable states ranges from $1.7 billion in Pennsylvania to $6.2 billion in Washington. This development harms trade, growth and jobs in the USA and overseas, weakens the bonds with friends and allies, and shifts the attention away from the shared strategic challenges that genuinely threaten the market-based Western economic model.

Trump has previously been persuaded to back off of trade threats with the argument that states that backed him in the 2016 presidential campaign will be hard-hit.

Trump has attacked the legendary Harley-Davidson motorcycle company, warning "we won't forget" after the firm said it planned to shift some manufacturing offshore due to European Union tariffs.

Motorcycle maker Harley-Davidson said earlier this week that new tariffs imposed by Europe on certain manufactured goods will cause a "tremendous cost increase" that the company will have to shoulder.

Previous year the European Union exported $43.6 billion worth of cars to the United States. Trade showdown: The global trade clash is heating up this week.

The report assesses the immediate damage to the USA economy at $13 billion to $14 billion, with much larger indirect costs from retaliatory measures by the United States' trading partners. Chamber of Commerce (.pdf), 579,300 are supported by global trade and approximately 6,160 companies export goods from locations in the state.

Last week, European Council President Donald Tusk warned that Trump's policies are harming trans-Atlantic relations and that "we must be ready to prepare our Union for worst-case scenarios".

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