Mon. Dec 9th, 2019

Trump redoubled the tariff war and removed a possible agreement with China

The proximity of elections and the announcement of a principle according to China

to end more than 18 months of trade war led to speculation about the possibility that Donald Trump reduce tension and renounce the use of tariffs as a weapon of political pressure. Nothing is further from reality. The truce with Beijing is much less tied than the US president said in his day and this, in rebound, forces him to seek compensation measures for farmers in his country, the group most harmed by the conflict and Chinese reprisals and , at the same time, the electorate that most needs to be re-elected. The exports from Europe and Latin America they are back in their sights.

"There is no deadline" for the entry into force of phase one of the pre-agreement with China announced September, Trump admitted yesterday in London. The statement spread fear in the markets, which they expected to be applied since this month and the threat of imposing new tariffs to imports such as mobiles, computers and toys made in China It will vanish. Without an agreement in sight, theoretically on December 15, another round will come into force, a punishment that the White House had postponed to prevent it from negatively affecting the Christmas campaign.

Clash with France

Washington threatens tariffs of up to 100% for French products

That his Chinese interlocutors have long smelled the urgency of the president of the United States to end the war has not helped him at the negotiating table. Trump said yesterday that it may be better to wait for the November 2020 elections to reach an agreement with Beijing and recalled that it is the Chinese economy that is most suffering from the consequences of the trade conflict. In the United States, consumption has not suffered but industrial investments have been frozen for months, prey to uncertainty.

Instead of loosening, global trade tension increases. The White House on Monday restored tariffs on steel and aluminum imports from Brazil and Argentina. The decision caught both countries by surprise, whose leaders enjoy great harmony with the current administration. A few hours later, the US International Trade Office published the list of French products that it is considering subjecting tariffs of up to 100% in response to the call coming into force Google rate , which imposes a 3% tax on technology giants to compensate for their low taxation in countries where they obtain benefits.

Giving long

The president suggests that the pact with Beijing could be postponed until after the elections

In a tense press conference held in London on the fringes of a NATO summit, Trump reported his talks about it with the president of France, Emmanuel Macron. "We have some minor differences" but "we will probably overcome them," he said. Macron nodded, although he warned that if they enter into force their country will respond and will not do so alone but with the European Union. France "will never" give up the rate, said its Economy Minister Bruno LeMaire (unless the United States accepts the creation of a similar tax on a global scale). "They are jealous" of US technology champions, said Commerce Secretary Wilbur Ross.

The subject of the dispute are French imports worth $ 2.4 billion annually. Its appreciated wines and cheeses, Louis Vuitton bags, L'Oréal cosmetics and Le Creuset pans are potential collateral victims of the conflict, a case other than tariffs – in this case, authorized by the Trade Organization – that Washington has adopted in response to Europe's illegal subsidies to Airbus.

The official reason for the tariffs on metals in Brazil and Argentina is the damage that “the massive devaluation” of the real and the peso is causing to American farmers, Trump argued in a tweet launched Monday before six in the morning (Washington local time). The loss of currency value is due to the serious economic difficulties that both countries are going through, and their governments are spending their dollar reserves to curb it, but these explanations have not softened the White House.

Another underlying reason is the recent increase in purchases of meat and cereals by Beijing from Latin American countries as part of its strategy to diversify its business partners and rely less on the United States. Last week China signed an agreement with Argentina to buy not only soy but also derived products. The news can make good the fears of many farmers, from Kansas to Virginia, with enough age and memory to remember how by the time the cereal embargo decreed by Jimmy Carter to the USSR was canceled, Moscow had already replaced its suppliers, and the Americans stayed out of the market.

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