Get ready for the 'largest trade war in economic history'
07 July 2018, 02:54 | Joann Bryant
Trade tensions starting to affect global economy
Chinasays that it has been "forced to take a necessary counterattack" against the United States because of recent USA import taxes on Chinese products.
The Trump administration has argued that China has deployed predatory tactics in a push to overtake USA technological dominance.
The goal was to impose tariffs on products the Trump administration thought China could improve with the help of US intellectual property.
Beijing insists it's the injured party.
"The Chinese side promised not to fire the first shot, but in order to defend the core interests of the country and the interests of the people, they had to be forced to make the necessary counterattacks". "Changes in trade policy could cause us to have to question the outlook", he said during a panel talk in Portugal.
Earlier on Friday, President Donald Trump followed through with tariffs on $34 billion worth of Chinese products early Friday, prompting in-kind retaliation from Beijing.
"A rise in trade protectionism would increase global risk aversion and disproportionately affect non-USD countries due to their relative economic openness", analysts at Bank of America Merrill Lynch said in a recent note.
At the same time, China is trying to present a friendly face to foreign businesses, including American players.
The big question is how far the hostilities between Washington and Beijing will go.
Washington imposed 25 per cent duties on $34 billion of imports from China, the first in a series of possible increases that President Donald Trump says could affect up to $550 billion of Chinese goods, more than the total amount China exported to the USA past year. "If this ends at $34 billion, it will have a marginal effect on both economies, but if it escalates to $500 billion like Trump said then it's going to have a big impact for both countries". "These tariffs could mean the difference between a profit and a loss for an entire year's worth of work out in the field, and that's only in the near term", Bible said. In fact, the scuttlebutt in Washington is that the Chinese were keen on making a deal to whittle down their surplus by pledging to buy $200 billion worth of American goods during talks in May, but the US President instructed his negotiators to seek ironclad guarantees, not just promises.
Another $16 billion of goods could follow in two weeks, Trump earlier told reporters, before suggesting the final total could eventually reach $550 billion, a figure that exceeds all of US goods imports from China in 2017.
The influential US Chamber of Commerce urged Trump this week to reconsider his actions, saying the counter-tariffs now affected $75 billion in American exports and endangered US jobs.
One study said as many as 400,000 jobs could be lost.
In April, the White House instructed the United States Trade Representative to consider $100 billion in additional tariffs against China.
"We never wanted to see the escalation of trade frictions into a trade war".
China's tariffs on hundreds of USA goods include top exports such as soybeans, sorghum and cotton, threatening U.S. farmers in states that backed Trump in the 2016 U.S. election, such as Texas and Iowa.
Washington-based think tank the Peterson Institute for International Economics (PIIE) expects U.S. tariffs on Chinese goods, which it says particularly target computers and electronics, to hurt multinationals more than China as well as other firms in Asia.
"Imposing 25% tariffs on United States whiskeys could put the brakes on an American export success story", Christine LoCascio, senior vice president for global trade at the Council, said in a statement. But in doing so he has alienated and angered longtime US allies, many of which have imposed duties on American goods in response to Trump's tariffs of 25 percent on imported steel and 10 percent on aluminum.
An official at a company in Shanghai that handles customs clearance for importers said to Reuters that the port of Shanghai is said to have put on hold clearing some USA imports through customs.
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