USA, The Duty Ceasefire Is Over: New Ultimatum To China

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The commercial pax disappears: 200 billion products end up in Trump’s viewfinder. And markets and the international community are affected

The commercial truce between the United States and China is over: what was to be the commercial “pax” has vanished with the Trump administration’s decision to impose new duties on 200 billion Chinese products, increasing them from 10% to 25% and triggering the inevitable retaliation in Beijing. A spiral that shakes the international community and the markets, with Wall Street recovering in the final but closing the worst week since the beginning of 2019.
US Treasury Secretary Steve Mnuchin handed US warning to Chinese Deputy Premier Liu He: ” China has three to four weeks to reach an agreement, otherwise duties will be levied on another 350 billion dollars of Made in China “. 

The two days of negotiations in Washington ended with nothing. Black smoke that thwarted the hope of an agreement in extremis, a compromise that avoided the new escalation. After all, Donald Trump was clear: “The negotiations continue in a very cordial manner, the dialogue was frank and constructive and an agreement is still possible. But China cannot think of negotiating an agreement with the US at the last minute. This is not theSleeping Joe “, he wrote on Twitter, referring to Joe Biden, the most credited opponent for the White House challenge in 2020. 

For the White House, therefore,” there is no hurry “ . handed over to the deputy prime minister of Beijing Liu He, but the US ultimatum heralds a nightmare scenario, with the trade barriers that would in practice hit Beijing’s total export to the United States, valued at about $ 540 billion last year “The duties make America stronger, not weaker”, assures the American president, rejecting the forecasts of those experts who are considered “owls” in the White House. the total clash with China, predicts a recession of the American economy by the end of 2020, just when it will go to vote for the presidential elections. 

Meanwhile, Beijing is preparing to pay dearly for the reverse gear on the draft agreement finalized in months of work, an agreement that seemed to have been made. The increase in US tariffs at midnight between Thursday and Friday risks further slowing the economic growth of the Dragon and weighing around 0.3% on its GDP. The measures launched by the US hit 5,700 Made in China products, from high chairs for children to Christmas tree lights, but also electronic devices, computer cards, furniture, tiles, car components, foodstuffs.

The answer that the Chinese authorities have called “inevitable” is now awaited. “We are forced”, they say from Beijing, but Trump appears calm. Few are so many in his administration. Beyond the expected counter-duties, the real nightmare is always the same: the phantom of the debt, that “nuclear option” that the Asian giant could decide to put on the table to put tycoon America on the ropes. There have been disturbing signs these days, with the last two auctions of US Treasury securities deserted by China, notoriously the main buyer. Beyond the tones, in short, both Trump and Xi seem condemned to sanction that long-awaited pact, because of their global and internal leadership. But in times of great economic and financial instability, the risk is that peace will arrive too late.