Published: Mon, June 03, 2019
Worldwide | By Lisa Hogan

EVs could get more expensive as USA trade war heats up

EVs could get more expensive as USA trade war heats up

After the trade war cease-fire in December, China had bought roughly 13 million metric tons of soybeans from the United States.

Deadlock with the Asian giant comes as President Donald Trump is expanding his trade fights on multiple fronts.

They say bad news comes in three's; China confirmed that it is ready to restrict rare earth minerals should the trade dispute with the United States escalate further.

The U.S. approach to trade talks had been "bullying and America First", whereas the principles of China's approach to negotiations were equality and cooperation, said Dai Xianglong, who headed the People's Bank of China from 1995-2002 and remains an influential figure in China.

Trump revealed that the tariffs would be imposed late Thursday evening via Twitter, saying that the 5% would be implemented on June 10 and that the percentage would "gradually increase until the illegal immigration problem is remedied".

A rare sign of appeasement in the growing tension between the two sides of the Pacific, the US Treasury acknowledged Tuesday that none of the major trading partners of the United States - including China, therefore - had manipulated its currency to draw an undue advantage.

"Trump's tariff policy has not won any converts over the past year".

Given the trade imbalance, Beijing's tariffs are unlikely to spark any major concession from the US.

Washington has imposed billions of dollars in tariffs on Chinese exports to the US and Beijing has struggled to match those sanctions, since USA exports to China are much smaller. It also escalated the stakes this month by putting Chinese telecom giant Huawei on a blacklist that effectively bars US companies from supplying it with computer chips, software and other components without government approval.

The US imports 80 percent of its rare earth needs from China.

A blockade on the supply of rare-earth magnets could have a devastating effect across swathes of the US' economy, Technology Metals Research LLC said.

The People's Daily, the newspaper used to issue the warning, has only used the phrase "Don't say we didn't warn you" twice in the past - the first time being in 1962 before China's border war with India, and more recently in 1979 at the outset of the China-Vietnam war. Four years ago when the Trans-Pacific Partnership was being negotiated, public opinion on free trade agreements was evenly divided (24 percent good and 26 percent bad), while almost half (49 percent) said they were not sure.

The latest impasse closely resembles weeks of deadlock between USA and Chinese negotiators in the lead up to a dinner encounter between the two leaders in Argentina last December.

"This quarter was extremely challenging, and we are not at all satisfied with our results", said Art Peck, president and CEO of Gap in a statement.

"We had a deal and they broke the deal", Trump said at the White House.

Of course, soybeans are just one part of a larger picture.

The big USA tech names can survive for a while in a bad market, but their high-flying stock prices aren't as likely to be as resilient. "We shouldn't look like we really want it that badly". This is amidst trade tensions between the United States and China, the world's largest producer of rare earths.

More than 100,000 migrants have been apprehended at the U.S. southern border over the last two months, Sputnik previously reported.

Meanwhile, Chinese Vice Foreign Minister Zhang Hanhui accused the US of engaging in "naked economic terrorism" in the trade war.

Trump administration officials are talking to Mexican leaders, and Trump hasn't closed the door entirely on the ability of the USA and China to reach an agreement eventually without offering a deadline. "The escalation of the trade war between China and the United States will seriously affect their development in China and the world", Dong said. "I don't believe they can do that".

Trade tensions between Washington and Beijing escalated sharply this month after the Trump administration accused China of having reneged on its previous promises to make structural changes to its economic practices.

"Sometimes they said a deal was within reach and sometimes they said it was very hard to reach a deal", Lu told reporters in Beijing on Monday.

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