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Settlement with China over trade war unlikely

The trade war between the world’s two largest economies officially began Friday as tariffs on $34 billion of Chinese goods went into effect. Calling it the “biggest trade war in economic history,” Chinese officials had said China would raise similar tariffs on U.S. imports including pork, soybeans and automobiles. Ana Swanson of The New York Times joins Hari Sreenivasan for more.

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  • HARI SREENIVASAN:

    The Chinese government quickly retaliated in what they called "the biggest trade war in economic history." Yesterday, the U.S. imposed 25 percent tariffs on tens of billions of dollars of goods imported into the United States from China. What happens next in this battle between the world's two largest economies? To help make sense of it, Ana Swanson, a reporter for The New York Times joins us now from Washington D.C.. First, what are they retaliating with? What are they penalizing U.S. producers?

  • ANA SWANSON:

    Well, the Chinese penalties fall very heavily on some of the major U.S. exports including soybeans, pork, airplanes and automobiles and they are really designed to enact the kind of maximum pain on some areas of strong support for the president including farm country. So farmers actually have already been feeling some of the effects of these tariffs; just the threat of tariffs has already caused soybean prices to drop, for example.

  • HARI SREENIVASAN:

    Now, the consumer in the United States, how are they likely to feel this trade war? We've kind of had a couple of rounds earlier. I mean, we've famously heard of washing machines and the prices of those increasing. But is there a direct effect of what happened in the last couple of days?

  • ANA SWANSON:

    With this latest round of tariffs, the Trump administration has actually designed them not to hit consumers so directly so that the type of things that you would buy in Wal-Mart are not going to be taxed directly. However, they have decided to hit a lot of what are called intermediate goods. So these are things that factories in the United States use to make other products. So in the short run, I think the pain is really going to fall more heavily on small and medium sized manufacturers than on consumers. But I've been talking to manufacturers recently and they are intending on passing some of those prices on.

  • HARI SREENIVASAN:

    Alright. What's the prognosis for this ending or what's the timeline? In the next couple of weeks is there anything that's going to happen that can either ease this tension or make it worse?

  • ANA SWANSON:

    The Trump ministration has talked about these tariffs as a negotiating tactic. So a bid to bring China to the table and level, what they describe as an unfair playing field. However, there are no apparent negotiations going on with the Chinese at this time. You know, several weeks to a month ago, there were talks but the Trump administration felt that what the Chinese were offering fell short. So at this point, you know a an escalation may be more likely than some kind of negotiated settlement. The Trump administration has threatened further tariffs if the Chinese retaliated. And China has threatened to respond. So really, no signs right now of a negotiated settlement in the near term.

  • HARI SREENIVASAN:

    All right. Anna Swanson of the New York Times joining us from Washington. Thanks so much.

  • ANA SWANSON:

    Thank you.

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