Tuesday, 16 October, 2018

'Retaliation week' in USA as tariffs from Canada, Mexico, China hit

China Warns US'Opening Fire On World With Tariff Threats 'Retaliation week' in USA as tariffs from Canada, Mexico, China hit
Melinda Barton | 07 July, 2018, 10:14

The Trump administration contends China has deployed predatory tactics in a push to overtake United States technological dominance. President Xi Jinping has balked at USA demands to stop subsidizing Chinese firms under his plan to make the nation a leader in key technologies by 2025.

President Donald Trump's trade war with China kicked off on Friday, when the United States started applying 25 percent in tariffs on $35 billion worth of Chinese imports and China fired back with taxes on the same amount of USA goods.

The Chinese response, announced by the Chinese Ministry of Commerce following Washington's decision, is set to impact a slew of USA agricultural products and industries, ranging from soybeans to seafood.

The initiative of US President Donald Trump to impose 25% duties on imports from China, the total value of which is estimated at $34 bln, came into force on Friday.

American Soybean Association President John Heisdorffer, a soybean producer from Keota, Iowa, emphasized the importance of the Chinese market and the investment USA farmers have devoted to cultivate the Chinese market.

The dollar fell Friday as markets weighed a stronger-than-expected jobs market with an escalating trade battle between the U.S. and China.

The trade war that erupted Friday between the United States and China carries a major risk of escalation that could weaken investment, depress spending, unsettle financial markets and slow the global economy.

Japan's main stock index, the Nikkei 225, gained 1.1% while the Shanghai Composite Index added 0.5%.

The conflict between the world's two biggest economies reflects chronic tension in their relationship as customers, business partners, and increasingly competitors. She also feels an European Union deal would soon follow, however, a trade deal with China could take awhile longer.

China's ruling Communist Party has insisted on making changes at its own pace while sticking to state-directed technology development seen as the path to prosperity and global influence. Beijing has announced reforms this year including ending limits on foreign ownership in its auto industry, but none directly addresses complaints that are fuelling its conflict with Washington.

First "34 (billion dollars), 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?"

That would bring the total of targeted Chinese goods to potentially $550bn - more than the $506bn in goods that China shipped to the U.S. previous year.

Chinese officials reject accusations of theft and say no foreign company is obligated to share technology. Heidi Heitkamp, D-N.D., highlighted further uncertainty caused by the renegotiation of the North American Free Trade Agreement and tariffs on steel and aluminum imports.

While the USA tariffs aim to cut down the trade deficit, there are worries about how China's retaliatory tariffs will hit the United States economy.

Trump's confrontational outlook applies to other trading partners as well as China, said Tai Hui, chief strategist for JP Morgan Asset Management, in a report.

"This is a potential concern for the outlook of corporate investment and consumption around world", said Hui.

The state-run China Daily fumed: "In effect, the Trump administration is behaving like a gang of hoodlums with its shakedown of other countries, particularly China".

"The worldwide financial crisis, which ensured that we now act in the framework of the G-20, would never have been resolved so quickly, despite the pain, if we hadn't cooperated in a multilateral fashion in the spirit of comradeship", Merkel said on Wednesday.

"The US has said that it is prepared to put traffis on hundreds of billions of dollars of more goods and China has said it will match that", he added.

"No one wins in a trade war, and it is America's manufacturing workers and working families who will bear the brunt of continued tariffs". Analysts say it can resort to some unconventional methods to inconvenience American businesses in China, with some fearing that it could mean tougher and subjective scrutiny on companies such as Starbucks and Apple, taking the trade war to uncharted territory.

"He's very familiar with their culture, practices and a number of the people who are working on these issues from the Chinese side", said Ernst.