President Donald Trump announced that he will seek 25% tariffs on $200 billion of Chinese goods coming into the United States. The tariff was set to be 10%, but the White House is seeking to increase pressure on China to adhere to fairer trade policies.
On July 10 the administration said it would ask for 10% tariffs on thousands of Chinese products. Those imports include consumer goods such as furniture, dog food and baseball gloves to manufacturing materials like chemicals, steel and aluminum.
Before the tariffs can be imposed the proposal must wind through a period of public comment. The US Trade Commission has set the deadline for such comments to be filed by August 30 with hearings scheduled for August 20-23.
It is expected that a 25% tariff will be greeted with even less enthusiasm than the already beleaguered 10% tariff has been subjected too. It is expected that a 25% tariff will seriously escalate the trade war now already in progress.
Back in July China accused the US of bullying and threatened to hit back with tariffs of its own. Investors are afraid that a full-blown trade war could slow down global growth. Many key US business groups have criticized harshly Trump’s tariff policy.
Last year, Alibaba founder Jack Ma and Malaysian Prime Minister Najib Razak launched an “e-hub” facility. One of their goals was to remove trade barriers for smaller locations and emerging nations. Now, Alibaba plans to set up a traffic control system that would use artificial intelligence for Kuala Lumpur. This would be their first time offering a service of this sort outside of China.
They plan to make live traffic predictions and recommendations by looking at the data they collect from video footage, traffic bureaus, public transportation systems and other locations. The technology will be integrated into 500 inner city cameras by May and Alibaba will work with the state agency Malaysia Digital Economy Corporation (MDEC) and the Kuala Lumpur city council to implement these changes.
A similar system in the Chinese city of Hagnzhou has reported traffic violations with as much as 92% accuracy, an increase in traffic speed of 15%, and an ability for emergency personnel to reach their destinations in half the previous time.
Several companies announced business deals worth $250 billion between the United States and China in conjunction with President Donald Trump’s recent Asia tour.
One of the more prominent deals was forged with Boeing. The aerospace giant forged a deal worth $37 billion in sales of planes to the communist behemoth. It was not made clear if this deal is part of a previous announcement from Boeing to sell hundreds of jets to yet unrevealed buyers.
General Electric was also able to forge three separate deals in China valued at a total of $3.5 billion. In addition, Qualcomm was in discussions with Xiaomi, Oppo and Vivo to purchase about $12 billion worth of semiconductors. Ford Motor Company will be investing $756 million in a joint venture with its Chinese partner Anhui Zotye Automobil to manufacture electric cars. This deal was already announced in August this year.
Some of the deals announced on Thursday have been in negotiations for a while, while other deals are only in the early stages, and the outcomes are far from assured.
Other deals in the works with China and US business include:
• A $83.7 billion investment by the China Energy Investment Corporation Limited in several shale gas and chemical manufacturing projects in West Virginia.
• Chinese state-run oil producer Sinopec has agreed to help develop Alaska’s liquefied natural gas sector. The deal, worth about $43 billion, is between Sinopec, the Bank of China and the China Investment Corp. It is estimated that about 12,000 jobs will be created during the construction of project.
• Chinese importers agreed to buy $5 billion worth of soybeans from US producers during 2018.
• Chinese e-commerce company JD.com said it will purchase $2 billion in food and agriculture products over the coming three years from the US, including $1.2 billion in Montana beef and Smithfield Foods pork.
Giant conglomerate, China Poly Group Corp, announced that it is continuing to look for trade and investment opportunities in the US, hopeful that the two countries will successfully overcome their differences over trade through talks and consultation.
The Poly Group is focused on investments in the US residential market and the cultural sector.
Chairman of the Group, Xu Niansha, said that investments in the US are an integral component of the company’s business strategy. His words were prompted by the high-profile visit of the US President Donald Trump, with a delegation of top US business executives to China.
Xu added that the president’s visit will allow the two countries to strengthen their commitment to each other and help to resolve any misunderstandings between the countries.
“China and US trade cooperation is essential for bilateral relations and hence mutually beneficial. We hope the two countries will continue on a path of cooperation considering China and the US are now each other’s major trading partner,” Xi said.
Starbucks, the giant coffee purveyor, is planning on adding an additional 12,000 stores to their existing 25,000 within the next five years. Luckily for people who like to see other stores besides those that sell coffee, not all of the additional 12,000 are going to be in Manhattan. As a matter of fact, only half are going to be built in either the US or China.
But if you really do like coffee and were even slightly worried that you might need to walk more than 30 seconds from wherever you may be to get your mandatory Caramel Brulée Latte, you can rest at ease now. As CEO Howard Schultz puts it:
“These are the early days of the growth and development of the company. If Starbucks was a 20-chapter book, I still think we’re in chapter 4 or 5.”
“Demand is there, and our ability to deploy capital and get the return on invested capital is very strong,” Starbucks President and COO Kevin Johnson said.
The fabulously successful company discussed their business plans at an investor day even in New York City last week. Schultz reassured his shareholders that:
“Our core business has never been stronger in the U.S. and around the world.”
Starbucks has its eye on the enormous potential market in China.
“Not only will China one day be bigger than the U.S., but our business in China will demonstrate that we will be one of the…most significant winners in terms of a Western consumer brand,” he said.