02 Sep 2019
Following the implementation of the U.S. tariffs imposed on Chinese goods, the Asian giant faced increased costs of between 5% and 10% on U.S. exports. However, China seems to be taking its time and will not haste in taking a decision of how to retaliate.
China’s tariffs on American vehicles and car parts will come at around the same time when more Chinese goods will be affected on December 15th. Panjiva, part of S&P Global Market Intelligence, highlighted that the goods were carefully chosen and affected by the tariffs, with the first group items seeing recovery in shipments and not a decline. Exports for such products fell by 15.2% in Q2 QoQ.
Last month, the Ministry of Finance announced tariffs on $75 billion worth of American products. Spokesperson for the Ministry of Commerce, Gao Feng said, ‘Under the current situation, we think the problem that should be discussed is the cancellation of tariffs on $550 billion worth of Chinese exports, to prevent further escalation of the trade war.’ He added, ‘At this time, the Chinese side is under serious negotiations on this topic with the U.S. side.’
The trade war has slowed down the Chinese economy and the government has been looking to boost the nation’s economy by relying on consumption rather than manufacturing and exports. A survey by the U.S.-China Business Council illustrated that half of the participants noted a loss in sales as a result of the tariffs. The report said, ‘Chinese customers are concerned about supply chain links that depend on American companies, which they increasingly view as unreliable business partners as a result of the volatility of the bilateral commercial relationship.’