Trump Tweets New threat in China-USA Trade war
There has been a new twist in the ongoing US-China Trade War. Trump said in a Sunday afternoon Twitter post (5 May 2019) that the current 10% tariffs on $200 billion worth of Chinese goods will increase to 25% on Friday.
He also threatened to impose 25% levies on an additional $325 billion of Chinese goods “shortly.”
Chinese Trade Delegation uncertain
Chinese Vice Premier Liu He had planned to bring a large delegation to Washington on Wednesday to hash out a trade deal.
There had been talk in recent days that something resembling a deal could result.
Instead, two sources briefed on the talks said the Chinese side may consider backing out of this week’s negotiations.
Trump’s new threats, they said, threaten the six-month truce. In return, Trump may have made them after Beijing threatened to renege on some previously discussed commitments.
One source had said the Chinese vice premier would likely cancel the trip he’d planned for himself and a 100-person delegation. This was for the final round of talks that U.S. officials had previously said could yield a deal by Friday.
In September 2018 Chinese officials canceled a trip in similar circumstances.
New Trade Reality or Trade War Negotiation tactic?
A second source said Trump’s decision to more than double the tariff rate on $200 billion of goods was meant to send a message to Liu to not come to the U.S. with more “empty offers.”
The Chinese spokesman would not elaborate on the number of people on the Chinese team, the length of the trip, or the date of departure.
He also emphasized that such back-and-forth in the trade negotiations have happened before. He underlined that the latest round of talks saw “positive” progress.
US-China Trade Sticking points
Major sticking points between the U.S. and China have been intellectual property theft and forced technology transfers. The two superpower also disagreed as to whether tariffs should be removed or remain in place as an enforcement mechanism.
Reaction to Trump Tweet
“The very fact that it’s a nuclear threat brings people to the table,” said Warren Buffett on CNBC. “But you don’t want to have too many nuclear threats out there because someday somebody may feel apt to fulfil one.”
World markets, including the S & P 500, the Shanghai and the Hong Kong stock exchanges dropped sharply on the news. However, later they all rebounded substantially on the basis that this was probably a negotiating tactic rather than a realistic future plan.
The response of US businesses over the last months to the trade war has been strong:
A number of US businesses have been relocating factories to Vietnam from China. More recently, many businesses have been importing and stockpiling goods as a pre-emptive measure in case the threatened tariffs materialise.
Amazon rebrands “Souq” as amazon.ae (UAE)
- On Tuesday, Amazon announced the launch of a new marketplace targeting the Middle Eastern market.
- With the launch, Amazon said that it is rebranding Souq, the e-commerce company it bought for $580 million in 2017, to Amazon.ae.
- The Souq.com URL takes you to Amazon.ae, but Souq is still available in Saudi Arabia and Egypt.
It should be possible for UK/EU or US based 3rd party sellers to start selling on the platform immediately.
Amazon opening new Fulfilment Centre in the Midlands of the UK
Amazon has plans to open a new new fulfilment centre in Kegworth, East Midlands, UK.
They are about to start recruiting for over 500 new permanent jobs.
Amazon’s new FC will help meet demand, expand selection and enable third-party sellers to scale up their businesses.
Stefano Perego, Amazon’s Vice President of UK Customer Fulfilment, said:
“We are thrilled to begin recruitment for 500 new permanent roles in Kegworth, with competitive wages and comprehensive benefits starting on day one. We are delighted to expand our operations in the East Midlands. With capacity to expand our workforce to over 1,000 permanent positions in the future, this new team will play a crucial role in delivering a first rate level of service for our customers.”
Kegworth will be the fifth Amazon fulfilment centre in the Midlands, the other ones being in Coalville, Daventry, Rugeley, and Rugby.
The first dedicated UK “receive centre” opened in Coventry in 2018.
This functions as a central hub that receives and sorts millions of products each year that are sold on Amazon.co.uk.