Trade war erupts as China fights back against USA tariffs

Relations have soured between US President Donald Trump’s administration and that of Chinese President Xi Jinping since they met in Beijing last year sparking fears of an all-out trade war

Relations have soured between US President Donald Trump’s administration and that of Chinese President Xi Jinping since they met in Beijing last year sparking fears of an all-out trade war

"Historically whether it's a trade war or a physical war, people go into it thinking it's going to be short-lived", said Cohen, "China wants to have an innovative economy".

Flags of USA and China are placed for a meeting between Secretary of Agriculture Sonny Perdue and China's Minister of Agriculture Han Changfu at the Ministry of Agriculture in Beijing, China June 30, 2017.

"China would never start a trade war but if any party resorts to an increase of tariffs then China will take measures in response to protect development interests". Chinese companies and investors girded for the worst, while economists cautioned any impact on the economy would be minimal. It asserted that Washington's move would trigger market turmoil across the globe, obstruct economic recovery, and pose a "grave threat" to the security of industrial value chains.

The government-run English language China Daily newspaper said: "The Trump administration is behaving like a gang of hoodlums with its shakedown of other countries, particularly China".

Throughout the escalating conflict, China has sought to take the high road, positioning itself as a champion of free trade, but state media ramped-up criticism of Trump on Friday.

Gao Feng, China's Ministry of Commerce spokesman said Thursday that the US, in hurting the world, is hurting itself, the Times reported.

Hours after Washington introduced 25 percent trade tariffs on $34 billion worth of Chinese goods, Beijing retaliated with mirror measures against American imports.

Japan's main stock index, the Nikkei 225, gained 1.1 percent while the Shanghai Composite Index added 0.5 percent.

From blue jeans to motorbikes and whiskey, the EU's hit-list of products targeted the most emblematic of American exports.

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. "And it's making American companies less competitive", Gonzalez said.

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"They're holding everything. because there's uncertainty", he said.

We expect that this is just the beginning of the trade war.

Trump has threatened to progressively ratchet up U.S. penalties to a total of $450 billion in goods - which would represent the lion´s share of all of China´s exports to the United States. "So we have 50 plus 200 plus nearly 300", Trump told reporters aboard Air Force One.

Gao said China would not bow to threats or blackmail and would have to fight back if the United States went ahead and imposed the tariffs. Officials said 545 U.S. products, including agricultural products and vehicles, will be hit by retaliatory tariffs.

Ironically, Cohen says the victims of Chinese IP or intellectual property theft won't benefit from the tariffs. Exports to the U.S. account for only 19% of all of China's exports.

A China central bank adviser said the planned USA import tariffs on $50 billion worth of Chinese goods - $34 billion plus a planned follow-on list worth $16 billion - will cut China's economic growth by 0.2 percentage points, the official Xinhua news agency reported Friday. China's tariffs on major U.S. exports like soybeans, sorghum, and autos, target Republican areas ahead of United States midterm elections.

Substantial they may be, but the average US consumer will likely not see these impacts directly for a little while.

Under the banner of his "America First" policy, Trump has also targeted other traditional trade partners of the United States, such as the European Union, Japan, Mexico and even Canada.

"But the tariffs will bring double-lose results. China is never the only side to suffer", Cheng said. "Imposing high tariffs definitely hurts China badly, but we will not be beaten down", she said.

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