USA tariffs take effect, China warns of 'counterattack'

LEADING ARTICLEJuly 6 2018 12:01am The Times Trading InsultsTrump’s protectionist policies put global growth at risk

LEADING ARTICLEJuly 6 2018 12:01am The Times Trading InsultsTrump’s protectionist policies put global growth at risk

American officials worry Chinese plans to create tech champions in fields including robotics, biotech and artificial intelligence will erode USA industrial leadership.

The paper holds that the tariffs will affect several US sectors, including technology (which Trump says he's trying to protect) while hitting multinational supply chains and firms, as well as harming foreign investment in Chinese firms by allies such as Japan, South Korea, and European Union countries.

China's tariffs on hundreds of USA goods include top exports such as soybeans, sorghum and cotton, threatening U.S. farmers in states such as Texas and Iowa who backed Trump in the 2016 USA election.

The ministry called U.S. actions "a violation of world trade rules" and said that it had "initiated the largest-scale trade war in economic history". Wansleben added that China also needed to change its positions in many areas, "but there's definitely more room for improvement".

With only $130 billion in U.S. imports to retaliate against, Beijing has said it will take "qualitative" and "quantitative" measures against the United States, triggering fears it could cripple the operations of USA multinationals operating there.

China was expected to respond dollar-for-dollar but did not immediately release details of the countermeasures, which were expected mainly to target agricultural products in a bid to hurt supporters of US President Donald Trump.

On Thursday, Trump said higher tariffs on an additional $16 billion in Chinese goods were set to take effect in two weeks. Chinese exporters have reported US orders fell off ahead of the tariff hike. Julian Evans-Pritchard from Capital Economics said: "While a weaker currency could offset some of the economic damage done by United States tariffs, the wider risks to financial stability would not be worth taking".

American apple growers are also concerned about the new export tariffs.

Friday's tariffs could just be the opening skirmishes in the war, as Trump has vowed to hit as much as $450 billion in Chinese goods, the vast majority of imports.

"The dynamic is different from anything we've seen", said Boughton. "From China canceling soybean orders, to cheese exports to Mexico plummeting, to farm equipment prices rising, the stories of financial loss are now rolling in from farms across America", the statement said. Trump has added to the tension by threatening new tariffs on cars.

About 800 Chinese products, from boilers to industrial robots and cars, will have a 25% tariff imposed when imported into the US.

Both Missouri and IL are among the top 10 soybean exporters.

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These consumer impacts are not lost on the Trump Administration.

Recent economic and capital market data showed that the arbitrary decision by the Trump Administration has brought painful results.

The US trade deficit in goods with China now stands at about $375bn.

The President is especially upset that the past president has promoted the interests of China at the expense of undermining American innovation and jobs.

For years, the Chinese government turned a blind eye to counterfeited USA luxury goods, bootlegged Hollywood films, fake Apple stores, trade secrets pilfered from cutting-edge US tech companies.

The US Chamber of Commerce says some states will have billions of dollars worth of exports at risk.

"The Trump administration is confronting Beijing for tactics like stealing United States technology", Rhonemus noted.

"At that point, the U.S. will be more interested in negotiations, and the Chinese side will also want to come to the table". Some fiber originally sold to China was redirected to Vietnam. If Trump were to realise his ambitions there would be more domestic plants producing goods that China or Europe used to provide, and more jobs created in those plants.

The Dow Jones Industrial Average shed 1,000 points from a high in mid-June, while the S&P 500 has also retreated notably since concerns about a trade war started to loom. "So we have 50 plus 200 plus nearly 300", Trump told reporters aboard Air Force One.

While US President Donald Trump has brushed off warnings that trade frictions with powerful partners like China could harm the US, Beijing has other weapons in its arsenal beside tariffs to cause damage in a fight.

The U.S. officially implemented tariffs on $34 billion worth of Chinese imports, including water boilers, airplane tires and X-ray machine components.

If this all sounds vaguely familiar, it's because China's strategy is very similar to the one the United States had not long ago keep China in line.

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