Published: Mon, August 06, 2018
Economy | By

China Prepared for Long Trade War With U.S., State Media Says

China Prepared for Long Trade War With U.S., State Media Says

Meanwhile, the Chinese economy is likely to feel a pinch, but that doesn't mean the country will back down, William Zarit, the chair of the U.S. Chamber of Commerce in China, tells NPR.

His tweets came amid a new surge in trade tensions with China.

In a front-page editorial on Monday, the overseas edition of People's Daily said Trump was "starring in his own carefully orchestrated street fighter-style deceitful drama" in which diplomacy had been reduced to nothing but a "trading game in which everything should follow the rule of America first".

The president claims his tariffs are "working big time" in helping pay down the debt, reducing taxes and aiding in trade deals.

"Governing a country is not like doing business", the state-sponsored newspaper added.

After weeks of half-measure negotiations between the two countries, talks have broken down and now both the White House and Beijing are locked in a rapid escalation of trade threats that experts have predicted could damage both economies.

The US and China implemented tariffs on $34 billion worth of each others' goods in July.

Washington is expected to soon implement more tariffs on $21 billion in additional Chinese goods, which China has already announced it will match immediately.

China has once again threatened to slap retaliatory tariffs against the United States in response to the Trump administration's trade policies, this time targeting $60 billion in us imports with tariffs ranging from 5 percent to as high as 25 percent.

On Wednesday, Trump proposed a higher 25 percent tariff on $200 billion worth of Chinese imports.

Recent data showed growth has already started to cool. The government has responded by releasing more liquidity into the banking system, encouraging lending and promising a more "active" fiscal policy.


China proposed a 25% tariff on imports of copper ore and concentrate from the USA, which shipped about 70 000 tons to the country past year. After the earlier action against $34 billion of USA goods, that left about $120 billion available for retaliation.

Most major United States crops were already hit by previously announced Chinese duties, so the fresh duties announced Friday on about $60 billion worth of American goods is leaving the farm largely unscathed.

White House economic adviser Larry Kudlow warned China after it announced its retaliatory tariffs, saying Beijing should not underestimate US President Donald Trump's determination to act on trade.

On Sunday, he tweeted that tariffs "were working big time".

Since January of this year, the total equities in China's stock market have tumbled by over $2 trillion, and most of the loss is due to the intensifying trade and tariff disputes with the US started by President Donald Trump.

China has now either imposed or proposed tariffs on US$110 billion in United States goods, representing the vast majority of China's annual imports of American products.

US Secretary of State Mike Pompeo (left) and China's Foreign Minister Wang Yi (right) shake hands during their bilateral meeting at the 51st Association of Southeast Asian Nations (ASEAN) in Singapore on Aug 3, 2018. "Market participants foresee a relatively stable Chinese currency in the near term, without fear of impacts from the U.S".

The Commerce Department said on Friday the trade gap surged 7.3 per cent to $46.3 billion.

On Friday, the People's Bank of China said it would require banks to keep reserves equivalent to 20 percent of their clients' foreign exchange forwards positions from Monday, in a move to stabilise the yuan.

The divergence between United States agriculture's collective struggle to retain healthy profits without access to the Chinese market and Huawei beating all of its American competitors to become the second most popular smartphone brand in the world just after South Korea's Samsung, is indicative of the fact that many of China's flagship brands cannot only survive but thrive even when being cut off from the USA market.

Trump has threatened to slap tariffs on virtually all of China's exports to the United States in the tit-for-tat trade conflict.

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