"Trump's policy to think about current benefits": US will increase duties on a number of Chinese goods by 25%

The United States will increase duties on a number of Chinese goods worth $ 200 billion from 10% to 25%. This is reported in the federal register of the United States.

“The rate of additional duties on May 10, 2019 will increase to 25% for products covered by the September 2018 action,” reads the document.

China has announced retaliation against US actions. According to the Ministry of Commerce of China, "the exacerbation of trade friction does not meet the interests of the peoples of the two countries and the whole world."

“China regrets this deeply, and if the US actually raises the tariffs, the Chinese side will be forced to take the necessary countermeasures,” RIA Novosti reports a Chinese statement.

In 2018, China and the United States adopted a number of decisions, in which the parties introduced mutual increased duties. American fees at a rate of 10% spread to Chinese goods with an import volume of $ 200 billion, the Chinese side set duties at a rate of 5-10% for imports of goods in the amount of $ 60 billion. Later, the US decided to raise the 10 percent rate to 25%.

In December 2018, US President Donald Trump and Chinese President Xi Jinping agreed to prepare a trade agreement within three months. As a result, Trump decided to postpone the planned January 1 increase in duties on Chinese goods to 25%.

By March 1, 2019, the agreement was never signed, but the American president said that negotiations were proceeding in a favorable way for the United States. At the beginning of May, the head of the White House announced that, starting from May 10, duties would still rise, since the dialogue with the Chinese side is going too slowly.

“With China, we are losing $ 500 billion. Sorry, but we are not going to do that anymore!” Trump wrote on Twitter.

Chances of a “last minute agreement”

Many financiers had the impression that the discussion was delayed, and there was no real compromise between the Chinese and the Americans, told RT BHBF leading analyst Oleg Bogdanov. The expert noted that Trump could not stand it and in his manner began to put pressure on the Chinese side, trying to get some concessions from it.

“The recent statements by the head of the White House about the intention to raise duties from 10% to 25% by $ 200 billion of Chinese products have already caused a stir in the markets among investors,” Bogdanov continued. - Experts have long been all counted. A real increase in tariffs of this magnitude will lead to a slowdown in the growth rate of the Chinese economy by 0.8–1 percentage points. This, in turn, will have an impact on US GDP, and will intensify the slowdown of the global economy, and in the future may lead to a global recession. ”

The United States has a serious budget deficit and problems with debts, as a result of which Trump decided to get out of the situation at the expense of his trading partners in the person of China, the analyst said. According to him, for the Chinese, a delay would be good, but the Americans are thinking about short-term gain.

“This is Donald Trump’s policy of thinking about the current benefits that the American economy needs now. But for the long term, the US president does not calculate serious moves and does not listen to his economists, ”said Bogdanov.

While the chances of a “last minute agreement” remain, Dmitry Alexandrov, chief strategist of UNIVER Capital, said in a conversation with RT.

"If the agreement is not concluded, we can see a sharp outflow of capital from emerging markets in the US and at the same time the Fed may be in conditions where it is necessary to ease monetary policy as quickly as possible," he said.

According to Alexandrov, the forecasts for the growth of the world economy will undergo a negative review by most financial institutions, including supranational ones.

The fall of China's stock markets

Despite plans announced by the American side, the delegation from China decided to arrive in the USA for a new stage of trade negotiations. The Chinese side explained its decision by the fact that ten consultations have already been held and the settlement of trade issues "is beneficial to both China and the United States, and to the whole world."

Trump later commented on China’s intention to hold another round of talks and said that Beijing would no longer be able to “strip” Washington $ 500 billion a year.

"It will not happen! China has just informed us that their deputy prime minister is flying to the United States with the intention to make a deal. We'll see, but I am very pleased that nearly $ 100 billion in fees are replenished annually by the US treasury. Good for the United States, for China not so much, ”Trump wrote on Twitter.

.... Guess what, that's not going to happen! China has just made us that they (Vice-Premier) are now. I`m very happy with over $ 100 bbl ...

Trump's statements about trade opposition with China led to the collapse of the Chinese stock market under pressure from the sale of securities. On May 6, the Shanghai Stock Exchange Index (SSE Composite) fell immediately by 5.6%, to 2906 points, and the indicator of the Shenzhen site fell by 6.7% to 1515 points.

Director of the office of sales "BCS Broker" Vyacheslav Abramov is of the opinion that the United States and China will find a way to make a deal.

“It’s not at all beneficial for the Chinese side to quarrel with the United States; the economy of the Middle Kingdom is not in a better position. The only question is how long these negotiations will last and what the final agreement will be, but it will be reached, ”said the expert in an interview with RT.