Asia stocks on edge before tariff deadline in Sino-US trade row

Andrew Cummings
July 5, 2018

Over 40 WTO members, including the 28 countries of the European Union - warned that the USA action could seriously disrupt the world market and threaten the WTO system, given the importance of cars to world trade. A Reuters analysis found just 1% of the 1,102 categories of products imported from China to the US are consumer goods.

It shows the depth of Chinese concern about a trade war with Washington, as Trump is set to impose tariffs on billions of dollars worth of Chinese imports on July 6. China's list is created to inflict pain on USA farmers and other groups that are important to President Donald Trump's political base.

China and the United States are expected to launch a potentially damaging trade war, but Beijing could hit its rival with tariffs first.

In Beijing, Foreign Ministry spokesman Lu Kang said Tuesday that China's government was merely fulfilling its duty to warn travelers of "potential dangers".

Asian stocks got off to a cautious start on Thursday as investors remained nervous amid a looming deadline for Washington's proposed tariffs on Chinese imports, leaving financial markets in a state of anxious uncertainty.

"U.S. measures are essentially attacking global supply and value chains". The US has claimed that China uses public funds to support its industrial development, which puts US companies at a disadvantage, paying no heed to the fact that China's use of policy and industrial funds to accelerate industrial expansion is a common practice across the world.

"China will not bow down in the face of threats and blackmail and will not falter from its determination to defend free trade and the multilateral system".

US companies ranging from whiskey distilleries to automakers like Ford and Tesla could be hit if China ramps up retaliatory measures.

"We will continue to assess the potential impact of the USA -initiated trade war on companies and will help companies mitigate possible shocks".

About 3 million Chinese tourists visited the 2016, an increase of 15 percent from the prior year.

He emphasized that USA tariffs on Chinese exports will hurt both Chinese and foreign firms.

They say China's decision in May to lower tariffs on imported cars will make little difference because imports make up such a small part of the market. "They firmly believe that free trade is a powerful engine for global economic growth".

The trade war could hurt multinational carmakers that sell imported US vehicles in China.

The warning comes as trade tensions mount between the two countries.

China's central bank moved to calm jittery financial markets on Tuesday after the yuan dropped through the psychologically significant 6.7 to the dollar mark, hitting its lowest in nearly a year. Now it is attempting to resort to an all-out trade and economic war to hold back China's normal development.

"We agree with nearly all the complaints the U.S. has against China, it's just we don't agree with how the United States is handling it", another diplomat said.

"China and European countries are natural partners", it said.

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