Jul 6, 2018

China hits U.S. with $34 billion in retaliatory tariffs

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China on Friday hit the U.S. with $34 billion in retaliatory tariffs on 545 products, and they are expected to take particular aim at states that voted for President Trump in the 2016 election.

Bottom line: Trump had promised that such actions would be met with additional U.S. tariffs, which means the two countries may be staring down the black hole of a tit-for-tat trade war.

The retaliatory duties on the United States took place immediately after Washington's initial tariff hike on Chinese goods on Friday morning.

  • China's list of U.S. products that will be affected includes soybeans, lobsters, bourbon, cotton, tobacco and liquified propane.
  • New U.S. tariffs on Chinese imports include such products as airplane tires, oil and gas drilling platform parts, lithium batteries, ball bearings and medical equipment like X-ray machines

Why it matters: For U.S. businesses, this trade war creates both short-term and long-term complications.

  • In the short term, some export orders will be canceled, thus leading to an immediate loss of revenue.
  • In the longer term, the uncertainty could make it harder for companies to properly plan. For example, bourbon makers in Kentucky effectively have to invest now for what demand will look like years into the future, while soybean farmers need to buy seed for future growing seasons.

What's next: Experts believe China may not be finished, reports the Washington Post. It could go beyond tariffs and increase the cost of custom inspections, while China's citizens could end up boycotting U.S. products — as happened last year to South Korea's Lotte Group.

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Coronavirus dashboard

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  1. Global: Total confirmed cases as of 5 p.m. ET: 659,367 — Total deaths: 30,475 — Total recoveries: 139,304.
  2. U.S.: Leads the world in cases. Total confirmed cases as of 5 p.m. ET: 121,117 — Total deaths: 2,010 — Total recoveries: 961.
  3. Federal government latest: President Trump is considering a quarantine on New York, parts of New Jersey and Connecticut.
  4. State updates: Alaska is latest state to issue a stay-at-home order — New York is trying to nearly triple its hospital capacity in less than a month and has moved its presidential primary to June 23. Some Midwestern swing voters that supported Trump's handling of the virus less than two weeks ago are now balking at his call for the U.S. to be "opened up" by Easter.
  5. World updates: In Spain, over 1,400 people were confirmed dead between Thursday to Saturday.
  6. 🚀 Space updates: OneWeb filed for bankruptcy amid the novel coronavirus pandemic.
  7. Hollywood: Tom Hanks and Rita Wilson have returned to U.S. after being treated for coronavirus.
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  9. Other resources: CDC on how to avoid the virus, what to do if you get it.

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