China says the "largest trade war in economic history" just began

GETTYThe US President has escalated tensions that could lead to a trade war

GETTYThe US President has escalated tensions that could lead to a trade war

A Global Times commentary suggested the USA was futilely trying to contain China's progress, stating, "If the U.S. is determined to escalate conflicts with China, then so be it".

In addition to the European Union and, now, China countries as far afield as Canada and India have also slapped tariffs on American goods in retaliation for the Trump administration's levies on imported steel and aluminium. Beijing said it had no choice but to respond in kind, but was yet to outline the full extent of any retaliatory measures.

The United States and China launched what Beijing called the "biggest trade war in economic history" Friday, imposing tariffs on billions of dollars of each other's goods amid a spiraling dispute over technology. "These tariffs will do nothing to protect United States jobs, but they will undermine the benefits of tax reform and drive up prices for a wide range of products as diverse as tool sets, batteries, remote controls, flash drives and thermostats". And during the presidential campaign, he heavily criticised trade agreements such as Nafta (the North American Free Trade Agreement), for destroying U.S. manufacturing, and called for tariffs to protect American firms from foreign competition. "If we're trying to sell there (another country), we should have the same opportunity as they have the right to sell here".

Li Daxiao, analyst at Yingda Securities, said news of the tariffs was already priced into the market, "therefore investors are not in as much of a panic as before".

Tariffs at an average 1.5% in 2016 were the lowest since the U.S. gained independence in 1776.

Beijing has accused the United States of "firing on the whole world" with the measures, pointing out that most of the Chinese exports under attack are largely made by companies with foreign investment - including from America. "However, we can't rule out a full-blown, recession-inducing "trade war"," it said. In fact, the scuttlebutt in Washington is that the Chinese were keen on making a deal to whittle down their surplus by pledging to buy $200 billion worth of American goods during talks in May, but the US President instructed his negotiators to seek ironclad guarantees, not just promises. Hardliners such as Peter Navarro, a trade policy adviser, says the U.S. is defending itself against an "aggressive" China.

It has increased sharply since 2001 when China joined the World Trade Organization and started to significantly improve its economic position and relations worldwide.

China says it may hike tariffs on United States pork, other goods.

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Forecasters say a full-blown conflict could knock up to 0.5 per cent off global economic growth through 2020 if Washington and Beijing impose tariff hikes on $250 billion of each other's goods.

Chinese shares, battered in the run-up to the tariff deadline, reversed earlier losses to close higher, but the yuan remained weaker against the dollar.

The Trade Partnership, a US-based economics research firm, suggests that the impact will be worse than initially expected, with around 400,000 jobs affected.

Until now, only $3bn of tariffs have taken effect, but President Trump has threatened new tariffs on many occasions.

While less than 1% of the goods that will be subject to Trump's tariffs are consumer goods, Trump's list of products subject to new tariffs includes machinery that does everything from cutting metal, to measuring electrical currents, to incubating chickens.

This also risks a chain reaction as countries start clamping down on partners, which then retaliate. The vessel is near the port of Dalian, according to ship-tracking data.

Since 1992, China has played an extremely important role in the U.S. trade.

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