CemWeek draws a timeline of the latest developments in the US-China trade dispute and ponders on how a possible trade war could affect global cement market dynamics and trade flows
The United States and China, the largest global economies, have set high import duties on several of each other’s goods, among them cement. As US President Donald Trump moves forward with the plan and China retaliates, the world prepares for a plausible trade war and its impacts on the global cement market.
A trade war is brewing
The new president of the United States’ aggressive style of international politics has been wreaking havoc on the markets. It started with his import tariff on aluminum and steel on Chinese goods as well as other United States’ long-term allies, such as Canada and the EU, which prompted Canada to reply with its own tariffs, while the EU is aiming to clear a trade deal with the US. Yet, the latest move – which the government justified by saying it needs to protect national security, the intellectual property of US businesses, and to reduce the trade deficit between the two countries – consists of imposed tariffs on around USD 50 billion worth of goods coming from its largest trade partner, China. This move, however, set off a trade war whose effects are yet to be fully assessed, as it enters its initial stages.
The US government first set tariffs on foreign solar panels and washing machines on January 2018, which China, the world’s largest manufacturer of both, decried. Later, the Trump administration imposed tariffs of 25 percent on steel imports and of ten percent on aluminum imports, mainly targeting Chinese products. Yet, tariffs were extended to trade partners such as the European Union, Canada and Mexico, which some have matched, claiming that these were harmful to US manufacturing efforts. Later, the president had the United States Trade Representative apply tariffs of USD 50 billion on Chinese goods, based on Section 301 of the Trade Act of 1974, claiming that the tariffs were “a response to the unfair trade practices of China over the years”, such as the theft of US intellectual property.
This prompted China to accuse the US of starting a trade war, and retaliated by imposing its own trade sanctions after negotiations between the two parties fell apart. The first tiff started on July 6, when the US imposed a 25 percent import tariff on USD 34 billion worth of Chinese imported products, while China responded with similar tariffs. This prompted the US to impose an additional ten percent tariff on USD 200 billion worth of Chinese imports, to begin in August 2018. Among these products were mineral goods, such as cement and other related products.
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