(SNL News) China has officially challenged through the World Trade Organization the latest round of U.S. tariffs imposed on Chinese goods, the Geneva-based trade body said on August 27.
Beijing formally requested WTO dispute consultations with Washington over the Trump administration's imposition of additional 25% duties on 279 Chinese import product categories worth US$16 billion.
The new U.S. tariffs are inconsistent with the provisions of the WTO's General Agreement on Tariffs and Trade, China said, since they only apply to Chinese goods and exceed Washington's bound duty rates.
China's WTO request opens a 60-day period for holding talks. Beijing may request that a WTO panel intervene if negotiations fail to resolve the dispute in that time.
On the same day that China's request was circulated to WTO members, U.S. President Donald Trump squelched the idea of holding negotiations now with Beijing.
"It's been — it's too one-sided for too many years, for too many decades. And so it's not the right time to talk," Trump said during a meeting at the White House on August 27, when he unveiled a new trade deal framework for the U.S. and Mexico.
"But eventually, I'm sure that we'll be able to work out a deal with China. In the meantime, we're doing very well with China," Trump also said.
U.S. and Chinese officials resumed trade negotiations last week but failed to reach a substantial breakthrough, U.S. Commerce Secretary Wilbur Ross told Bloomberg News on August 28.
During the meantime, as reported separately on www.snl.com, base metal prices caught a break during the week ended August 24, regaining some territory lost in recent months as trade negotiations between the U.S. and other countries continued to dominate headlines.
Price ring
Metal prices generally made gains during the week ended Aug. 24, with base metals partly recovering from recent losses.
Zinc stuck out in gaining about 6% to end the week at US$2,507.50/t. Lead, copper and nickel prices also increased, up 5%, 3% and 1%, respectively, to US$2,077/t, US$6,000/t and US$13,305/t.
The price of aluminum climbed 3% up to US$2,061.50/t. Iron ore was largely even, closing Aug. 24 at US$67.48/t. Gold and silver edged up, with gold gaining 2% to close the week at US$1,206.60/oz and silver gaining 1% to close at US$14.84/oz.
Talking points
In gold's persistent doldrums, ANZ Research analysts see some shine.
The price of gold has performed poorly in recent months, while it has racked up record short positions. The analysts wonder if a short covering rally may be in the cards, boosting the price of gold, and maintained a short-term price target of US$1,290/oz.
"In the past, such extreme levels of short positions have led to a rally in prices," the analysts said August 23. "In 1999, short positions rose fivefold to hit a then record level of 80,000 contracts. Not long after, gold prices rallied 16% from US$250/oz to US$290/oz over the course of two months."
The analysts also said a falling gold price could entice buyers back to the market, and economic and political uncertainty could help boost gold's fortunes.
Still, amid macroeconomic uncertainty, investors have so far turned to the U.S. dollar instead of gold, the analysts said.
"When combined with strong economic data in the U.S. and the subsequent rise in equity markets, investors have dumped gold," the team wrote. "Outflows from gold-backed exchange-traded funds have surged, while consumer demand stagnated."
But increasing U.S. political uncertainty may push investors to reconsider the dollar as a safe haven, the analysts suggested. Coming midterm elections later this year could see Democrats regain control of Congress, and ongoing investigations into the Trump presidential campaign have gathered steam.
"This all comes at a sensitive time for the White House," the analysts said.
(Source: www.snl.com)