Trade Wars: Trump loads first volley against China

Jul 07, 2018, 03:04
Trade Wars: Trump loads first volley against China

While Trump touts announcements of jobs created in steel plants due to the tariffs, manufacturing industries warn many more jobs will be lost in companies producing autos, auto parts, appliances and other goods that depend on imported components.

However, while no details have been provided as yet, it looks like a Chinese retaliation may be in the works.

Despite this, Liang says he is not concerned about his business, noting if the U.S. don't want his flags, he can always work for someone else.

China has vowed to respond "immediately", with experts warning that tit-for-tat measures between the two financial superpowers will send shockwaves around the global economy and strike at the heart of the world trading system.

The big question is how far the hostilities between Washington and Beijing will go.

"So we have 50 plus 200 plus nearly 300", Trump said, adding "It's only on China".

China's Foreign Ministry said Beijing has already begun implementing tariffs on some USA goods in retaliation.

At the stroke of midnight Washington time, the USA pulled the trigger on 25-per cent duties on about US$34 billion in Chinese machinery, electronics and high-tech equipment, including autos, computer hard drives and LEDs.

"In a gaggle aboard Air Force One Thursday, Trump all but confirmed that he was following through with his threats, ticking through the additional tariffs he planned to levy after the initial salvo kicked in: ". China's tariffs on major U.S. exports like soybeans, sorghum, and autos, target Republican areas ahead of United States midterm elections.

The Chinese authorities have imposed 25% duties on imports from the United States worth about $34 bln a year, according to a statement by the Main Customs Administration of the People's Republic of China. These tactics include cyber-theft and requiring American companies to hand over technology in exchange for access to China's market.

Beijing denies it's in the wrong and says it's ready to fight a trade war until the end.

Gao Feng, China's Ministry of Commerce spokesman said Thursday that the USA, in hurting the world, is hurting itself, the Times reported. -China trade involves parts and supplies, rather than final goods - so the most immediate effect will be felt by the companies making the products, not the consumers finding them on store shelves.

"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". But after three rounds of negotiations between the two sides, including a Chinese pledge to significantly increase purchases of American products, Trump made a decision to go ahead with the tariffs.

But, with the GOP facing strong political headwinds ahead of November's mid-term elections, China's countermeasures left both Trump and Republican lawmakers increasingly vulnerable to voters who appear likely to boost the fortunes of opposition Democrats.

On Thursday, Ford Motor Co said that for now, it will not hike prices of imported Ford and higher-margin luxury Lincoln models in China.

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

Kennedy say he thinks the Trump administration's enthusiasm for the conflict "will erode as the economic pain and political fallout from a trade war begin to take hold". "We urge the two governments to come back to the negotiation table with the aim of having productive discussions based on achieving results - focused on fairness and reciprocal treatment - instead of escalating the current situation".

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