Retaliatory Measures Against US Tariffs Already In Effect, Says China

06 July, 2018, 18:53 | Author: Brooke Harris
  • China ‘fully prepared’ for trade war with US

"The $50-billion trade war will slow down China's GDP growth by 0.2 percentage points", Ma told Xinhua, China's official news agency.

"China is forced to strike back to safeguard core national interests and the interests of its people", the Commerce Ministry said in a statement to CNN on Friday.

The United States is due to impose tariffs on $34 billion of goods it imports from China on Friday.

"The key is whether there will be more - a second round of revenge and retaliation and a third round", said Shi Yinhong, a professor of global relations at Renmin University in Beijing.

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

"China imposed counter-tariffs on some import products from the United States at 12:01 pm Friday immediately after new U.S. tariffs took effect, the country's customs authority said".

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 Chinese Foreign Ministry said "retaliatory tariffs" took effect.

He described the potential escalation to reporters aboard Air Force One: "Thirty-four, and then you have another 16 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?"

"Whether it's through trade war or other means, the end goal is to make China subservient to the United States", said He Weiwen, vice president of the Center for China and Globalization, in Beijing.

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.

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"Frankly, I don't know what action China could take at the moment that would allow the U.S.to not impose tariffs", the USA source said, adding that there was no evidence the two governments had any substantive engagement at the moment that could lead to the shelving of duties.

Speaking at a weekly news conference, Commerce Ministry spokesman Gao Feng warned the proposed US tariffs would hit global supply chains, including foreign companies in the world's second-largest economy.

Foreign companies accounted for $20 billion, or 59%t, of the $34 billion of exports from China that would be subject to new USA tariffs, with US firms accounting for a significant part of that 59 percent, Gao said.

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

SEMI, which represents semiconductor companies and others in the manufacturing supply chain for the electronics industry, estimates that the initial round of tariffs will increase costs for its members by between $20m and $35m.

In 1900, tariffs accounted for about 30% of the total value of U.S. imports, as the country was trying to restrict imports and develop its young industrial sector. The European Union is reportedly weighing tariffs of up to $300 billion on USA products, should the US impose its threatened 20% to 25% tax on auto imports.

The Asian nation slapped levies on an equal amount of American goods, including heartland staples like soybeans, corn, pork and poultry - a move President Donald Trump said would compel him to hit China with another round of duties on up to $500 billion in products.

China's state media lashed out at US President Donald Trump on Friday (July 6), accusing the White House of behaving like a "gang of hoodlums" as the world's two biggest economies careened towards the start of an outright trade war. If the U.S.is determined to escalate conflicts with China, then so be it.

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".

Christine Lagarde, head of the International Monetary Fund, has already sounded the alarm about a tit-for-tat cycle of retaliation, saying it would only create "losers on both sides". "For example, my vehicle is from America".

"It's still hard for me to believe the Trump administration could develop and negotiate an overarching package with China that genuinely sticks", Kennedy said.

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