Container ship is docked at Kwai Chung Container terminal in Hong Kong
U.S. President Donald Trump and China sparred over tariff hikes and other retaliatory moves yesterday, as governments elsewhere were brainstorming strategies to cope with the trade war between the global economic giants.
China said it will “fight to the end” and take countermeasures against the United States to safeguard its own interests after President Donald Trump threatened an additional 50% tariff on Chinese imports in retaliation for Beijing’s backlash against the 34% tariffs he ordered on his April 2 “Liberation Day.”
Meanwhile, Chinese state-run companies were told to help support the country’s financial markets after they were hit by massive saves of selling on Monday.
While world markets calmed somewhat after frenzied selling over two trading sessions that wiped out trillions of dollars worth of wealth, leaders in Asia shifted into damage control mode.
Help for Japan’s automakers and steel mills
Japanese Prime Minister Shigeru Ishiba spoke with Trump late Monday and then convened a task force yesterday to mitigate damage from the 24% U.S. tariffs imposed on Washington’s biggest ally in Asia.
Economic Revitalization Minister Ryosei Akazawa was appointed lead trade negotiator and senior officials were dispatched to Washington to follow up on the Ishiba’s talk with Trump.
Ishiba told his ministers to do their utmost to get Trump to reconsider and also to mitigate the impact from the U.S. “reciprocal” tariffs, which he said would be a blow to all industries, Chief Cabinet Secretary Yoshimasa Hayashi told reporters.
India wants a deal
India’s Foreign Minister S. Jaishankar spoke with his U.S. counterpart Marco Rubio yesterday [Macau time], pitching for an early conclusion of negotiations for a bilateral trade agreement.
India, which faces a 26% tariff on its exports to the U.S., is hoping for concessions as part of the trade deal. A first tranche of the agreement is expected by this fall. Washington wants India to allow more open market access for U.S. dairy and other farm products, but New Delhi has balked at that since farming employs the bulk of India’s workforce.
India’s Trade Minister Piyush Goyal planned to meet with exporters today to gauge the potential impact and cushion the economy from the tariffs.
A State Department statement said Rubio and Jaishankar discussed ways to deepen collaboration, the tariffs and “how to make progress toward a fair and balanced trade relationship.”
Malaysia promises ‘soft diplomacy’ response
Malaysian Prime Minister Anwar Ibrahim said his government and other Southeast Asian countries would send officials to Washington to discuss the tariffs and it was working to build a consensus on a unified response among the 10 members of the Association of Southeast Asian Nations as they convened an investment conference in Kuala Lumpur.
“We do not believe in megaphone diplomacy,” Anwar said, “As part of our soft diplomacy of quiet engagement, we will be dispatching together with our colleagues in ASEAN our officials in Washington to begin the process of dialogue.”
Still, he chided the U.S., saying Malaysia’s trade with the U.S. had long been a model of mutual gain, with its exports supporting Malaysia’s growth as well as high-quality jobs for Americans. The 24% tariff recently imposed on Malaysian imports was “harming all” and might have negative impact on both economies, he said.
Anwar said Malaysia would stick to a policy of diversifying its trade at a time of uncertainty over globalization and changing supply chains.
European union mulls taxes on US tech
European Union trade ministers were closeted Monday in Luxembourg to weigh possible steps that could include taxes on U.S. tech companies like Google, Apple and Amazon. The European Union’s executive commission – which handles trade issues for the 27-country bloc – is set to impose tariffs on Jeans, whiskey and motorcycles on Wednesday in response to Trumps increase in steel and aluminum tariffs.
But it hasn’t decided a response yet to Trump’s “reciprocal” tariff of 20% on European goods announced last week and a 25% tariff imposed on autos from everywhere. French officials have raised imposing tariffs on services like internet commerce or financial services, where the U.S. sells more than it buys from Europe and is in theory more vulnerable than in goods trade.
Germany’s economy minister, Robert Habeck, was defiant as he arrived, saying the premise of the wide-ranging tariffs was “nonsense” and that attempts by individual countries to win exemptions haven’t worked in the past.
It’s important for the EU to stick together, he said. That “means being clear that we are in a strong position — America is in a position of weakness.”
So far the European approach has been to selectively target politically sensitive goods rather than impose sweeping retaliation since like most economists officials they view tariff wars as a lose-lose game. MDT/AP
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