Unlike Canada and Mexico, US trade accounts for only 20% of China’s exports. Even if it loses the US market, it has not yet had a catastrophic impact. Therefore, China’s enterprises are hard, and the mainland’s manufacturing index in July has rebounded from the June low, and economic losses can be controlled. Trump claims that China’s manufacturing industry has lost 7 million jobs, so it is very necessary to reach a trade agreement with the United States in an instant and succumb to the conditions proposed by the United States. From the trade data, China handles US tariffs by transferring exports to other countries, such as Vietnam and Mexico.
In the first half of this year, China’s exports to the United States fell 12%, and US exports to China plummeted 19%. China is no longer the largest trading partner of the United States. This status has been replaced by Mexico and Canada, while Vietnam’s exports to the United States have risen 33%. Trump claimed that China only uses Vietnam to transship, and Vietnam’s exports are basically made in China, and it is necessary to sanction Vietnam. Trump also claims that the import tax is paid by China and that Americans do not need to pay.
US and Canada tax affect consumers
Heavy machinery manufacturer Caterpillar announced a $70 million increase in costs last season and a $25 million to $35 million tariff this year. Import tariffs on steel and aluminum have led to a significant increase in production costs. US companies and consumers are required to pay an additional $3 billion a month in tariffs, and US companies are also responsible for reducing efficiency and bringing in additional $1.4 billion in monthly costs. The United States has announced that tariffs are mainly for consumer goods, such as computers, mobile phones, clothing and shoes, which directly affect consumers.
Large retailer Wal-Mart and chain department store Macy’s have warned that they must increase their fares to offset tariffs. For each American household, an average of $1,000 per month is spent on consumer goods.
In the United States, non-agricultural jobs increased by 164,000 in July, and the unemployment rate remained at 3.7%. Even though no additional tariffs are currently seen to have a major impact on the US economy, Trump maintains its tough stance and adopts a comprehensive ban on China’s trade negotiations.
China’s negotiating attitude is tough
The Chinese negotiating team also adopted a tough attitude. Since Trump suddenly raised the tariff of 200 billion US dollars on Chinese imports from 10% to 25% in May, and then listed Huawei in the sanctions list, China has already felt that the United States is not a reliable negotiation. The opponent, constantly raising the requirements, constantly moving the gantry. China’s attitude has changed, no longer giving in to the United States, adopting a procrastination policy, and waiting for the next US president to take up the post to really negotiate a new trade plan.
The United States also faces two hot-handed issues in the diplomatic field. The United States unilaterally withdrew from the Iranian nuclear agreement and reached a restricted medium-range missile agreement with the former Russian government. Negotiations between Iran and Russia are also delayed, until a more rational US president negotiates. It is impossible for China and the United States to reach any trade agreement within this year. The internal disturbances in Hong Kong have not subsided. Under the drag of external troubles, Hong Kong stocks have only fallen all the way and cannot see support.
It is difficult for China and the United States to reach an agreement this year, and Hong Kong stocks will not see support for the time being.