European Union deal a short-term ceasefire, not a formal armistice

European Union deal a short-term ceasefire, not a formal armistice

Kerry Wise
July 31, 2018

But the taxes also exact a toll on US businesses and consumers, which pay more for imported products.

Last spring, companies warned that the Trump administration's steel and aluminum tariffs could hit their bottom line.

One key aspect of the agreement, according to the official who spoke on condition of anonymity, was that the two sides had agreed to work together to tackle China's market abuses.

"People are making their voices heard with this White House about the negative impact of tariffs, and the potential for greater negative impact", said Kevin Madden, a Republican consultant who has worked with private companies to promote free trade.

He has relied on China's sizable appetite for USA soybeans - it's the biggest importer of soybeans in the world - but the 68-year-old said now his crops are caught up in the ongoing trade dispute with Beijing.

A U.S. flag flies near a field of soybeans in Tiskilwa, Illinois, U.S., July 6, 2018.

Washington hopes that agreement will open another market for U.S. agricultural exports.

"We just opened up Europe for you farmers", he said at a rally in the farm state of Iowa, where Mr Trump has seen his strong support in opinion polls dim.

EU officials said little had been given away by Juncker and that Europe had emerged as the victor by getting Trump to defer the threatened vehicle tariffs which would have hit European carmakers hard. For Africa, the prospect of an all-out trade war between the world's two largest economies threatens to create a range of unwanted challenges. Not only does it offer zero spreads, no margin requirements, with known and predefined risk set by the trader - it also allows for immediate reaction to changing market conditions.

Many longtime USA allies - Canada, Mexico and the European Union - promised swift and severe retaliation to the tariffs being levied against them. But U.S. businesses have been complaining loudly. In Europe, alarm bells have been sounded over China's growing economic influence there.

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Also, it seems US President Donald Trump is looking at another version of the Trans-Pacific Partnership (TPP) after it pulled out of the trade deal in January this year. "And you know, I'd say that's why we were pretty adamant from the beginning that there's a better way to go about this".

"The Chinese are not clear what the United States wants", said Scott Kennedy, who studies the Chinese economy at the Center for Strategic and International Studies.

"Engaging is unilateralism or protectionism is not the way out", Geng said, when asked about Kudlow's comments. The State Council, China's cabinet, has chose to increase fiscal spending and relax monetary policy to help growth, which would add to depreciation pressure on the currency.

Although, I think this last one is just a bluff, so China takes it easy on its part when Trump goes ahead with the previous plan and imposes tariffs on $200 billion of Chinese products.

The impact has fallen mainly on USA farmers and Republican party lawmakers.

In announcing the aid for farmers, Perdue acknowledged that United States farms were being hurt by what he called "illegal retaliation" to the tune of US$11 billion so far.

Trump has come under political pressure from US farmers over his trade actions that have seen American agricultural produce hit hard with retaliatory tariffs, especially by China, the largest single consumer of American soybean exports. "I think it would be healthy in the long run, in the short run it may be a little tight".

A more conciliatory tone emerged from Mnuchin, who told CNBC the United States was willing to reopen trade talks with China if Beijing was willing to make "serious changes", as he said the European Union had indicated it was willing to do.

The Trump administration's $12 billion farm aid package is a sign to many in the agricultural sector that the administration does not foresee an end to the escalating trade war with China this year.

It is unknown whether this would simply offset the expected loss in business as a result of the retaliatory tariffs, or if the intent is to increase exports beyond previous levels.