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Trade war, day 145: Trump talks up his tariffs as hopes of a deal fade

The low expectations for the Trump-Xí Jìnpíng 习近平 meeting in Buenos Aires later this week just got lower. In an interview with the Wall Street Journal (paywall), the American president expressed a high level of satisfaction with his tariffs on Chinese goods, reports the Wall Street Journal (paywall).

Trump said it was “highly unlikely”that the U.S. would hold off on raising import levies from the current 10 percent to 25 percent on January 1, and indicated that he would be willing to extend tariffs to all imports from China:

I am very happy with what’s going on right now. We’ve only used a small portion of what we have to use because I have another $267 billion [in imports] to go if I want, and then I’m also able to raise interest [Ed: he meant tariff] rates. And we have money that is pouring right now, pouring…

The only deal that would really be acceptable to me — other than obviously we have to do something on the theft of intellectual property, right — but the only deal would be China has to open up their country to competition from the United States…. Otherwise, I don’t see a deal being made. And if it’s not made, we will be taking in billions and billions of dollars.

Markets reacted negatively to the news, reports The Street, with Apple shares in particular taking a hit at the prospect of tariffs on more of its products made in China.“Tariffs imposed in September had spared the iPhone, which generates half of the company's sales, but affected product lines such as Apple accessories and the Mac Mini,” notes the South China Morning Post.Responding to Trump’s comments, Chinese foreign ministry spokesman Gěng Shuǎng 耿爽 said, “The Chinese side is willing to resolve the trade issues [with the US] through serious dialogue that is based on the principles of equality and integrity.... But we will also resolutely defend our interests [during the talks],” per the SCMP.Vice Minister of Science and Technology Xú Nánpíng 徐南平 said that China will thrive despite U.S. technology export restrictions: “China has been developing at the medium-to-low end in the global industrial chain…. If the US decides not to export technology to China, China will be forced to grow its edge at the medium-to-high end.”

Other trade war news:

Where Chinese investment is welcome 
China makes new friends in Europe's former crisis nations / Bloomberg (porous paywall)
The U.S. is refusing Chinese capital and the European Union is imposing a continent-wide vetting process for Chinese investments. Southern European countries that were close to insolvency a decade ago are much more welcoming.Automakers feel the heat
Tesla sales in China plunge 70 percent in October, according to auto industry body / CNBC
“An official from China Passenger Car Association said data from the industry body showed Tesla sold just 211 cars in the world's largest auto market in October.”
Tesla shares slip after report says China sales sank 70% in October / CNBC
Tesla says reported sales fall in China ‘wildly inaccurate’/ Global Times
"While we do not disclose regional or monthly sales numbers, these figures are off by a significant margin," Tesla senior communications manager Cheryl Zhang told the Global Times.
GM warned Trump that his China tariffs would hurt jobs. He now complains that it's happening. / Insider
Donald Trump asks General Motors to stop making cars in China / ReutersWinners and losers
Taiwan's underdog city Taoyuan is reborn in China-US trade spat / Bloomberg via Straits Times
“The former Japanese enclave west of Taipei had long suffered as local companies shifted factories to the Chinese mainland to benefit from lower wages and globalizing trade. But with tensions escalating between the world's two largest economies, Taiwan's biggest tech firms are now moving some production back home and many are turning to this city of two million on the northwestern coast.”
Farm bankruptcies on the rise in Upper Midwest / AP
“The number of farms filing for bankruptcy is increasing across the Upper Midwest, following low prices for corn, soybeans, milk and beef, according to a new analysis from the Federal Reserve Bank of Minneapolis.”
Crop drop: China swine fever outbreak to curb its soybean imports / Reuters
“China’s imports of soybeans are set to drop as an outbreak of African swine fever hits its huge pig herd and saps demand for the animal feed ingredient, making it easier for buyers to keep shunning U.S. cargoes amid the Sino-U.S. trade war.”Effects on Chinese economy 
China's industry profit growth slows for 6th month as trade war takes toll / SCMP
Party's over: As margins tumble, China steel mills brace for hard times / The Star Online
Bulk commodities under pressure as China steel prices plunge / FT (paywall)

—Sky Canaves


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