Nestled in an industrial estate near the southern Chinese city of Shenzhen, Jiamushi Furniture Company has crafted quality wooden furniture since 2002. Its sweeping showroom teems with minimalist Scandinavian, rustic European and ornate Chinese styles, though when it comes to the wood itself, one variety is the undisputed favorite: North American red oak, known for its versatility and distinctive grain.
"It's no secret. It's definitely an open cottage industry in China, big time," said a spokesman for U.S. Customs and Border Protection, who spoke on condition of anonymity to discuss tariff enforcement policy. "It's not uncommon to hear stories of Chinese brokers charging a nominal extra fee to somebody to essentially say, 'Don't worry about it. I'll make sure it doesn't say 'China' on it.' "
China said Friday it will impose new tariffs on $75 billion worth of U.S. goods and resume duties on American autos.
The Chinese State Council said it decided to slap tariffs ranging from 5% to 10% on $75 billion U.S. goods in two batches effective on Sept. 1 and Dec. 15. That happens to be when President Donald Trump’s latest tariffs on Chinese goods are to take effect.
It also said a 25% tariff will be imposed on U.S. cars and a 5% on auto parts and components, which will go into effect on Dec.15. China had paused these tariffs in April.
US President Donald Trump's threat to open a trade war with Mexico sent Wall Street sliding, with shares in carmakers among the worst hit. Markets in Europe were already spooked by news the US would hit Mexico with tariffs in an anti-immigration measure. The main US share markets closed between 1.3% and 1.5% lower. General Motors, which like many carmakers has operations in Mexico, fell 4.3%.
News of the Mexico tariff move comes amid a US trade war with China. Mr Trump announced in a tweet that tariffs on all goods coming from Mexico would be introduced until the country curbs illegal immigration into the US. From 10 June, a 5% tariff would be imposed and would slowly rise to 25% "until the illegal immigration problem is remedied", he said.
With a simple visit to an obscure factory on Monday, Chinese President Xi Jinping has raised the specter that China could potentially cut off supplies of critical materials needed by huge swaths of the U.S. economy, underscoring growing concerns that large-scale economic integration is boomeranging and becoming a geopolitical weapon.
With the U.S.-China trade war intensifying, Chinese state media last week began floating the idea of banning exports of rare-earth elements to the United States, one of several possible Chinese responses to U.S. President Donald Trump’s decision to jack up tariffs on hundreds of billions of dollars’ worth of Chinese goods and blacklist telecoms maker Huawei.
I think trade wars are a bad idea, as we should be bringing the world together for our collective good, rather then tearing it apart. While the United States, over time could find alternatives to imported rare earths, including more domestic mining and alternative product formulations, it could be unneccessarily harmful in the short-term for both the United States and China. It's no different then the OPEC trade embargo in the 1970s -- it was very harmful in the short-term, although in the long-term increased domestic production and fuel economy standards helped dull the pain, as did a loosening of the embargo.