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US, China fire first shots in 'largest trade war in economic history'

10 July, 2018, 05:24 | Author: Melinda Barton
  • China EU USA trade war alliance Donald Trump President Xi

On Friday 12:01 A.M. U.S. Eastern time, Washington will start taxing 818 Chinese products, including semiconductors and airplane parts, that are worth 34 billion U.S. dollars a year.

Speaking to reporters on Friday, Pruzin also said the WTO had "no basis" to believe the USA might pull out. The Chinese government had not officially confirmed on Friday afternoon that the retaliatory tariffs had taken effect.

Some Chinese ports had delayed clearing goods from the United States, four sources said on Friday.

China has said it will not "fire the first shot" in a trade war with the United States, but its customs agency made clear on Thursday that Chinese tariffs on American goods would take effect immediately after USA duties on Chinese goods are put in place. It is unclear when these will come into effect.

A record volume of USA crude oil is heading to China even as Beijing's planned tariffs threaten to cut off a relatively new and burgeoning business for US exporters.

Reprising the tactic he used against steel and aluminum imports, Trump in May ordered the Commerce Department to investigate whether imported vehicles and auto parts pose a threat to USA national security that justifies tariffs.

Terming the manufacturing of flags for Trump's 2020 bid as completely normal, he said, "That is trade".

The move comes after President Trump has repeatedly decried the USA trade deficit with China, which totaled over 375 billion dollars previous year.

China's soymeal futures fell more than 2% on Friday afternoon before recovering most of those losses, amid market uncertainty over whether China had implemented tariffs on a list of United States goods, including soybeans.

While it might bring some short-term victories to the US steel and aluminum industries, beef producers are going to carry a big part of the retaliation, he said.

China lashed out at the U.S. on Thursday, the day before a trade war is set to erupt between the world's top two economies, saying that Washington is effectively "firing at itself".

The additional duty is a tariff on importers, and they're not going to buy US product when they can buy product elsewhere for much less.

White House Council of Economic Advisers Chairman KevinHassett said in an interview on Fox Business Network on Friday Trump is "going to deliver better (trade) deals".

Asked whether US companies would be targeted with "qualitative measures" in China in a trade war, Gao said the government would protect the legal rights of all foreign companies in the country. He said the policies are "a bit Far West, of an eye for an eye, a tooth for a tooth".

"Clearly we're concerned about the overall trend line of USA trade policy, particularly the amount of retaliation our industry is experiencing now or will experience", said Edward Brzytwa, director of worldwide trade for the Washington-based association.

At a media briefing, foreign ministry spokesman Lu Kang spoke of the "unfair tariff" actions.

While the initial volley of tariffs was not expected to have major immediate economic impact, the fear is that a prolonged battle would disrupt makers and importers of affected goods in a blow to global trade, investment and growth.

The lack of any dramatic reaction suggests many market players have already factored the escalation in trade tensions into their trading strategies. The Shanghai Composite index slipped 0.3 percent and Hong Kong's Hang Seng lost 0.5 percent.

China's commerce ministry called the U.S. actions "a violation of world trade rules" and said it had "initiated the largest-scale trade war in economic history".

Today, the ministry added: "The Chinese side promised not to fight the first shot, but in order to defend the core interests of the people, they had to be forced to make the necessary counter-attacks". For example, my auto is from America.



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