Published: Wed, July 11, 2018
Economy | By

Trade war erupts as China fights back against U.S. tariffs

Trade war erupts as China fights back against U.S. tariffs

Chinese officials reject accusations of theft and say no foreign company is obligated to share technology. "It was never comfortable with the West being one bloc", said a European official involved in EU-China diplomacy.

"Attempted corporate homicide" is what CEO Daniel McGahn called it.

"John Heisdorffer, an Iowa soybean farmer and president of the ASA, warned of the impact of the tariffs on farmers".

These consumer impacts are not lost on the Trump Administration. The crop represents some 41 percent of the value of products on the Chinese retaliatory list.

In a statement released shortly after the tariffs took effect at 2pm AEST, China's Ministry of Commerce called the tariffs - which impose a 25% duty on $US34 billion worth of Chinese exports to the U.S. - "typical trade bullying" and warned that retaliation would be swift. President Donald Trump , who has claimed that winning a trade war would be easy, has said that he's prepared to drastically raise tariffs on more Chinese imports.

President Donald Trump, warning of subsequent rounds of tariffs affecting pretty much all Chinese exports to the U.S.: "You have another 16 (billion dollars) in two weeks, and then, as you know, we have $200 billion in abeyance and then after the $200 billion, we have $300 billion in abeyance. Ok?"

Mexico is also studying how to reduce the economic strain of an escalating trade spat, an action that China has also adopted. "We absolutely will not fire the first shot, and will not implement tariff measures ahead of the United States doing so", it said, without elaborating. "For China to massively reduce its trade surplus with the USA, it has to in some way substitute its imports away from the European Union to the US, which would have a significant negative impact on the European Union producers". "So we have 50 plus 200 plus nearly 300".

President Trump announced the tariffs on $50 billion of Chinese goods in April.

U.S. President Donald Trump has warned that the United States may ultimately target over $500 billion worth of Chinese goods, an amount that roughly matches its total imports from China a year ago.

"The United States has blatantly violated WTO rules", said Hu, the foreign ministry spokesman.

The stakes go beyond the economy.

"And the impact on USA business, in my estimation, will be substantial". Instead, he should be talking about reciprocity and allowing American companies the same rights in China that America grants Chinese companies when they try to invest and operate in the United States. Concerns were raised that the deal would give China access to the financial records of millions of Americans, including members of the military.

If enacted, the import duty would make US oil less competitive than other crudes, likely causing a decline in Chinese purchases and forcing USA oil firms to find other buyers.

Wansleben added that China also needed to change its positions in many areas, "but there's definitely more room for improvement". Trump said it was to protect USA security interests.

"We see a strong resistance of 6.70 for now and the 6.90 level seems China's bottom line for the yuan exchange rate".

Whatever the reasons, China has been gaining traction. "China deficit, this is a point that I think the administration misunderstands", she said. It is now the world's largest exporter of high-tech products.

China announced a new 25% tariff in response to USA action under Section 301 of the Trade Act of 1974.

"They just stole it, and they are using it against us", he said.

The riskiest economic gamble of Trump's presidency could spread as it enters a new and unsafe phase by imposing direct costs on companies and consumers globally.

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