The U.S. cancellation of tariffs on China is expected to heat up, and the coordination of China -US coordination should be strengthened in response to global challenges

06.07.2022

Number of this text: 3479, the reading time is about 5 minutes older

Introduction: The current world economy is facing severe challenges, which is of great significance to strengthen the communication and coordination of Sino -US macro policy communication. It is conducive to the stability of the global industrial chain supply chain, which is conducive to China and the United States and the entire world.

Author | First Financial Elegant Zhou Erin

According to Xinhua News Agency, on the morning of July 5th, Liu He, a member of the Political Bureau of the Central Committee of the Communist Party of China, Deputy Prime Minister of the State Council, and comprehensive economic dialogue between the Chinese and American comprehensive economic dialogues, held a video call with the US Finance Minister Yellen. The two sides exchanged opinions on the macroeconomic situation and the stability of the global industrial chain supply chain.

The two sides believe that the current world economy is facing severe challenges, which is of great significance to strengthen the communication and coordination of Sino -US macro -policy communication, and jointly maintain the stability of the global industrial chain supply chain, which is conducive to China and the United States and the entire world. China has expressed concerns about the cancellation of tariffs on China, sanctions, and treating Chinese enterprises fairly. The two sides agreed to continue the conversation and communication.

At the regular press conference held by the Ministry of Foreign Affairs on the 5th, the Ministry of Foreign Affairs spokesman Zhao Lijian stated on the relevant issues that the Chinese position on the issue of tariffs has always been clear. The cancellation of all tariffs on China is conducive to China and the United States, and it is conducive to the entire world. According to the estimates of the US think tank, the cancellation of all tariffs on China and Canada will reduce the inflation rate by US inflation by one percentage points. Under the current high inflation situation, early cancellation of tariffs on China and Canada, American consumers and companies can benefit early.

The global market has heated up the U.S. cancellation of tariffs on China, the RMB has risen in the short term, and the emotions of A shares have continued to pick up.

On Tuesday (July 5), the RMB's intermediate price was reported at 6.6986, and 85 basis points were raised. Following the short -term RMB against the US dollar in the previous day, it has increased by more than 100 points. As of the close of the day, it was reported to the US dollar at 6.7190 yuan to the US dollar, a 202 o'clock from the previous trading day. The offshore RMB was reported to the US dollar 6.7118 yuan, down 176 points from the end of New York on Monday.

Cancel down tariff expectations

The market's expectations of canceling the US -Canadian tariffs on China are not unprecedented. The "301 clauses" of the US Trade Law are valid for 4 years, and the U.S. Trade Representative Office (USTR) began re -examination in May. Charlielay, a foreign exchange and emerging market analyst of commercial banks in Germany, told reporters that the first batch of tariffs imposed by the United States for US $ 34 billion in imports of Chinese imports will expire on July 6, and another batch of $ 16 billion in China will be US $ 16 billion in China. The tariffs on imported goods will also expire on August 23, and there will be a batch ($ 200 billion) will expire on September 24. "Tariff reduction or automatic expiration is actually similar, but the narrative around them will be different," he said.

Huo Jianguo, vice chairman of the China World Trade Organization Research Association, told First Financial reporters that the Trump administration had previously imposed tariffs to destroy the global normal trade investment environment, leading to negative changes and shocks in the industrial chain supply chain. The United States is actually correcting this error, which is beneficial to the United States itself, helps to alleviate American inflation, and at the same time is beneficial to stabilizing the global economy, trade growth, and industrial chain. There will be more obvious contributions. "

Huo Jianguo believes that US President Biden has always stated that he will re -examine the Trump's tariffs on China during the period of Trump. The background is the pressure of domestic economy and inflation and Biden's administrative pressure in the midterm election year.

The US Consumer Price Index (CPI) increased by 8.6%year -on -year, hitting a new high in more than 40 years, which directly led to the Federal Reserve raising 75 basis points in June.

Indeed, the White House has recently been frequently "blowing" on tariff issues. For example, on May 10, Biden said to Washington in Washington that the White House was reviewing tariff measures implemented during the Trump administration period, which increased the prices of a series of goods from diapers to clothing and furniture. The White House may choose to completely cancel these measures. "We are studying what will have the most positive impact." And said that the cancellation of tariffs is currently being discussed.

On June 8th, Yellen acknowledged at the US House of Representatives fundraising committee that the Bayeng government was seeking tariffs on Chinese imported goods to "re -allocate". More information about the tariff plan will be provided in the next few weeks, and these changes are "actively considering." Yellen once again said that she believed that some tariffs were ultimately paid by Americans and hurt American consumers and companies.

When a spokesman for the Ministry of Commerce, Shu Jingsing said in response to the relevant issues that China has noticed that the United States has recently responded to a series of statements on considering the cancellation of tariffs on China and Canada. China's position on this issue is consistent and clear. Under the global high inflation situation, the cancellation of all tariffs on China from the interests of enterprises and consumers, which is conducive to China and the United States and the entire world.

Investment consulting company BCARESEARCH's geopolitical strategy research analyst Ma Yubu told First Financial reporter at the seminar that Biden had publicly stated that controlling the inflation rate was its primary task. There are not many domestic policies that have left Biden, but there are still some choices to control inflation in foreign policies.

In fact, many American economists, institutions and enterprises have been urging the Bayeng government to cut trade tariffs. A research report from PIIE in March (PIIE) reported that the "feasible plan" (including extensive abolition of a series of tariff measures) to cancel tariffs can reduce the US consumer price index (CPI) at one time by 1.3. Percent, equivalent to a disposable income of $ 797 in each American family. Liu Xiangdong, deputy minister and researcher of the China International Economic Exchange Center Economic Research Center, said in an interview with the First Financial Interview that the US inflation pressure was high and the Bayeng government faced a severe mid -term election situation. In order to accumulate political capital before the midterm elections, trade policies are feasible tools.

"From the perspective of the trade structure, the amount of trade between China and the United States continues to rise. If the United States wants to reduce inflation, it will need to input the input and lower supply of finished products. China is an important base for making finished products, and it will not be in a short time in a short time. Will be replaced by economies such as Southeast Asia. "Liu Xiangdong thought.

Sino -US macro coordination is of great significance

According to a recent report issued by the Oxford Institute of Economics, the global economic growth will slow down in the second half of this year to next year, including three major risks around the world, including high inflation affected economic prospects, the central bank's excessive shrinking monetary policy, and the continuous pushing the Russian and Ukraine conflict Commodity price.

Tommywu, a senior economist of Oxford Economic Research Institute, said that the inflation rate of major economies including the United States, the euro area, and the United Kingdom has reached a historical high. Factors such as rising food and energy prices, severe supply chain problems, and continuous Russian -Ukraine conflict will continue to keep inflation at a high level. At present, the central banks of most developed economies, including the United States, have controlled inflation as the focus of work. The development of economies has generally entered the interest rate hike cycle. Monetary policy is tightened. In addition It seriously affects the growth of GDP (GDP).

Liu Xiangdong believes that this is also an important place for China -US macro policy coordination. He said that the current international crisis is difficult to rely on the currency or fiscal policies of a single country. In terms of global inflation, it is mainly manifested in the rise in energy and food prices. This price increase unevenly affects developed economies and developing economies. And this requires the coordination and resolution of the two major powers of China and the United States, because both the United States and the Chinese currency or fiscal policy have a lot of spillover effects.

In addition, the problems faced by China and the United States cannot be solved by "single fight". Liu Xiangdong said: "For the United States, if you only rely on interest rate hikes, it will inevitably fall into the economic recession. Therefore, the United States must reduce the pressure on domestic inflation through a certain degree of trade policy adjustment. Similarly, China is facing the external market market. Changes also need to communicate with Western countries to relieve downward pressure facing markets and economy. "

In terms of maintaining the stability of the industrial chain supply chain, Huo Jianguo told First Financial reporters that the Trump administration's tariffs have damaged the global normal trade investment environment and led to negative changes or some shocks in the industrial chain supply chain. "The supply chain fluctuation is mainly to be restricted by the trade of some high -tech products, resulting in poor downstream processing links. In addition, the supply of supply of Russia and Ukraine, raw materials and major high -tech product components disrupted the original normal trade trade Circulation order. If you want to restore it gradually, you need to cancel these unreasonable tariffs, which is at least conducive to restoring the stability of the global supply chain. "Huo Jianguo said.

Liu Xiangdong also believes that in addition to the global epidemic challenge, the current impact of the supply chain brought by the Russian -Ukraine conflict has caused the stability of the international industrial chain, supply chain and logistics chain to be threatened. In particular, Russia and Ukraine are important suppliers of energy, food and raw materials. If these products cannot be effectively supplied, they need two major powers in China and the United States for related coordination to jointly promote stability.

Liu Xiangdong said: "For other economies, their abilities are not enough to coordinate these important global issues. Under the current circumstances, other countries will also watch the two countries of China and the United States, how to do common global challenges. , Coordinate to solve these problems. "

RMB short -term rising

Under the above expectations, the RMB continued to rise to the US dollar and rose through the 6.7 mark. In May, the RMB depreciated to the US dollar to nearly 6.82.

Barclays said that assuming that tariffs were completely canceled, the actual effective exchange rate (REER) was expected to appreciate 1.8%; if it was partially canceled, or it was equivalent to REER appreciation of 0.3%, that is, the RMB appreciated by the US dollar by 1%. However, reducing tariffs is not equivalent to a significant appreciation of the RMB. At the same time, the maximum directly affecting tariffs on US inflation is equivalent to 0.3 percentage points of interest cuts, but considering that high inflation is also very limited.

Ding Shuang, the chief economist of Standard Chartered China and North Asia, told reporters that if the United States has canceled all tariffs on China since July, it is expected to increase China's trade surplus to 0.2 to 0.3 percentage points of the US trade surplus. "After the cancellation of tariffs, we estimate that China's total exports to the United States will increase by 53 billion US dollars in 2022. Assuming that the Chinese side will also cancel some counter -tariffs on the United States, China's total imports to US products may increase by $ 15 billion. As a result, China's trade surplus to the United States in 2022 will expand US $ 38 billion, and the annual trade surplus accounts for GDP will increase by 0.2 percentage points. "

However, most traders and strategists interviewed by reporters still believe that the US dollar exchange rate will remain at a range of 6.6 ~ 6.9 throughout the year. In the future, the flow of exports and cross -border funds will still be the focus of attention. The expectations of tariff reduction are expected to drive export -oriented sections. However, the improvement of A -share emotions is more closely related to re -production and re -production and domestic policy support. Investment managers of a number of international asset management institutions told reporters that when the geopolitical risks are low and the market volatility is low, investors in the north often buy A shares net.

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