Trump Has No Idea How Tariffs Work And It's Harming Americans

Trump Has No Idea How Tariffs Work And It's Harming Americans

Sen. Rand Paul, R-Ky., said Sunday that imposing more US tariffs against China is a bad idea, and he has warned President Donald Trump's administration about the problem. Among more than 6,000 tariffed items on the previous 200 billion US dollars list are 1,150 items on which the over 50 percent dependent on Chinese imports, according to Chinese Academy of International Trade and Economic Cooperation.

The sector, crucial for the United States economy, also represents an important electoral base for Donald Trump.

USA officials said the Chinese negotiators have been reversing themselves on commitments made in earlier trade talks.

On Friday, around 5,700 categories of Chinese-made goods bound for the U.S. were subject to a 25 percent tariff, up from 10 percent.

The announcement sent Wall Street stocks plunging Monday, with losses on the tech-rich Nasdaq exceeding three percent, while the Dow Jones Industrial Average and broad-based S&P 500 both were both down 2.5 percent toward 1800 GMT. To date, tariffs have largely affected raw materials like chemicals and wooden beams used to make other products, so the cost increases appear incremental to the consumer.

Trump started raising tariffs last July over complaints China steals or pressures companies to hand over technology. "If someone attacks us on our doorstep, we will take them on and fight to the finish", China's foreign ministry spokesman Geng Shuang said. "Many Chinese scholars are discussing the possibility of dumping US Treasuries and how to do it specifically", Hu warned.

The Aussie was undermined by a series of tweets from US President Donald Trump during the session, adding to investor nerves after the US increased tariffs on $US200 billion worth of Chinese imports on Friday.

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Beijing unleashed its tightly controlled media this week after keeping a lid on rhetoric for months as the trade war with Washington reignited, with fiery clips from state media ricocheting around the Internet. "I don't disagree with that", he said to Fox News's Chris Wallace. Trump has demonstrated again and again that he is incapable of understanding the consequences of tariffs.

Sources have said talks stalled after China tried to delete commitments from a draft agreement that its laws would be changed to enact new policies on issues from intellectual property protection to forced technology transfers.

It imposed 10 per cent charges on $60 billion of imports but left other goods unaffected, possibly out of concern for Chinese companies that depend on USA technology and components.

Infratil shares dipped 2.99 per cent to $4.22 after the New Zealand infrastructure investment company said it was teaming with Canada's Brookfield Asset Management to buy Vodafone New Zealand from its United Kingdom parent company for $NZ3.4 billion ($3.2 billion).

Stock markets on both sides of the Atlantic staged a fightback Tuesday, paring heavy losses sparked by a raging US-China trade war over the past week. The VIX, however, is still far below the elevated levels it reached at the end of past year when the S&P 500 came extremely close to entering a bear market, meaning a decline of 20% or more from a recent peak.

US officials over the weekend sought promises of concrete changes to Chinese law and Beijing said it would not swallow any "bitter fruit" that harmed its interests. The sell-off accelerated on Monday after China announced plans for retaliatory tariffs.

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