Just over an hour after the Global Times’ Hu Xijing warned that China would announce retaliatory tariffs on certain US products, adding that “China has ammunition to fight back”, that’s precisely what happened when China’s Ministry of Finance said in statement posted on website late Friday that it would levy retaliatory tariffs on another $75BN in US goods with rates anywhere between 5 and 10%, with the tariffs set to be implemented in two batches, one at midnight on Sept 1 and another at midnight on Dec 15.
Additionally, China said it would resume 25% tariffs on US autos, stating that “China’s adoption of tariff-adding measures is a forced move to deal with US unilateralism and trade protectionism.”
Which is somewhat ironic, because of a time-zone difference quirk, it will in fact be China who will impose tariffs on the US first at midnight Beijing time, 12 hours before the US imposes its own tariffs on China.
The full Google-translated statement from the Ministry of Finance is below:
August 15, 2019, the US government announced that it would impose a 10% tariff on approximately US$300 billion of goods imported from China, which will be implemented in two batches from September 1 and December 15, 2019. The US measures have led to the continuous escalation of Sino-US economic and trade frictions, which have greatly harmed the interests of China, the United States and other countries, and have also seriously threatened the multilateral trading system and the principle of free trade.
In response to the above measures by the US, China was forced to take countermeasures. According to the “Customs Law of the People’s Republic of China”, “The Foreign Trade Law of the People’s Republic of China”, “Regulations on Import and Export Tariffs of the People’s Republic of China” and other basic laws and principles of international law, the State Council’s Customs Tariff Commission decided to produce 5078 originating in the United States. The tax items, about 75 billion US dollars of goods, plus 10%, 5% tariffs, in two batches from 12:01 on September 1, 2019, 12:01 on December 15 implementation.
Customs Tariff Commission of the State Council will continue to carry out the elimination of tariffed goods from the United States and Canada. In the list of 75 billion US dollars of goods, the excluded goods subject to review and approval, according to the exclusion method, do not levy the tariffs imposed by me for the anti-US 301 measures; the products that are not included in the first two batches of the scope of application for exclusion will be included in the third The scope of the batch can be applied for exclusion, and the application method will be announced separately.
s adoption of tariff-adding measures is a forced move to deal with US unilateralism and trade protectionism. The Chinese side once again reiterated that for China and the United States, cooperation is the only correct choice, and a win-win situation can lead to a better future. It is hoped that China and the United States will respect each other with mutual respect, mutual equality, words and trust, and words and deeds, resolve differences in a mutually acceptable way, and actively build a balanced, inclusive and win-win new Sino-US economic and trade order, and jointly safeguard and promote Reform and improve the multilateral trading system and promote mutually beneficial and win-win cooperation with other countries in the world.
The news sent US stock futures tumbling…
… the yuan tumbling…
… gold surging…
… and US 10Y yield sharply lower.
And then crude crashed as China clarified that an extra 5% tariff will be put on American soybeans and crude-oil imports starting next month
Meanwhile over in Jackson Hole:
Powell, on seeing the China news, realizing he now has to rewrite his entire speech pic.twitter.com/MtqxYAn25A
— zerohedge (@zerohedge) August 23, 2019
And the odds of a 50bps rate-cut in September just spiked back from yesterday’s plunge to zero…
And now we all await Trump’s angry reaction.