Thursday, 20 September, 2018

China blames United States for 'largest-scale trade war'

Exchange Group offices are seen in the City of London Britain Exchange Group offices are seen in the City of London Britain
Nellie Chapman | 09 July, 2018, 19:39

Noting the launching of Trump's tariffs with the U.S.

Just hours after the United States introduced 25 percent trade tariffs on $34 billion worth of Chinese goods, Beijing has retaliated with mirror measures against American imports.

China said today it was "forced to take necessary countermeasures", after Washington imposed tariffs on billions of dollars of Chinese imports at the stroke of midnight.

China's tariffs on United States goods came into effect immediately afterward, a spokesman for the Chinese Foreign Ministry said Friday.

It is unclear whether the soybean cargo, which did not arrive until after the penalties took effect, will pay the 25 percent higher tariff.

"Clearly the first salvos have been exchanged and in that sense, the trade war has started", said Louis Kuijs, chief Asia economist at Oxford Economics.

If China goes ahead with tariffs on USA plastics, it "could have a very clear negative effect on resin producers and others here to support the huge increase in production - railroads, truckers, pallet manufacturers and ocean carriers", Levine said.

President Donald Trump argues that new tariffs on Chinese goods are created to protect U.S. businesses and force China to change its economic policy.

"Trade war is never a solution", Chinese Premier Li Keqiang said at a news briefing with Bulgarian Prime Minister Boyko Borissov in Sofia before a summit with 16 central and eastern European countries.

Analysts said such a trade war would disrupt global supply chains and raise prices for consumers worldwide.

"I think products made in China are the best", said one shopper in a Beijing grocery story, who gave his name as Yang.

"Our baseline forecast assumes only a modest further escalation in the trade "war" this summer", Bank of America Merrill Lynch said in a Friday note.

As the tariffs approached, the United States central bank warned the impending trade battle was beginning to darken the otherwise blue skies of the robust American economy, now in its 10th year of recovery.

The office of the US Trade Representative announced a product exclusion process for Chinese products subject to Section 301 tariffs, seeking to soften the blow on US companies a little.

National Association for Manufacturers: "Tariffs will bring retaliation and possibly more tariffs", said Jay Timmons, president and CEO of NAM. Asian equities wobbled but also managed to end up.

Ahead of the planned tariffs, China said that the "US is opening fire on the entire world, including itself".

Beijing has accused the U.S. of "firing on the whole world" with the measures, pointing out that most of the Chinese exports under attack are largely made by companies with foreign investment - including from America. The products, all sold on Chinese e-commerce platforms, ranged from pet food to mixed nuts and whiskey. The Global Times, an English tabloid under the People's Daily, warned that China should be prepared for the United States to try to contain China's rise.

Stocks closed higher on Thursday as technology shares rose, but investors remained on edge as the US prepared to slap tariffs on goods imported from China. "So we have 50 plus 200 plus nearly 300", Trump told reporters aboard Air Force One.

"In effect, the Trump administration is behaving like a gang of hoodlums with its shakedown of other countries, particularly China", the state-run China Daily newspaper said in an English language editorial on Friday.

"When you don't have a direct impact on something, there's not a lot you can do", he continued.

Speaking to reporters late Thursday en route to a campaign-style rally in Montana, just before tariffs on U$34 billion worth of Chinese imports were set to go into effect, Trump said there are more to come.

That factor, combined with estimates that "over $20 billion worth of China-made products being targeted by the US tariffs are actually produced by foreign companies' joint ventures in China" - will make a trade war "difficult for the U.S.to sustain", the economist argued.

"This is not economic Armageddon".