United States tariffs on China take effect as Trump trade war escalates

Andrew Cummings
July 7, 2018

The Trump administration contends China has deployed predatory tactics in a push to overtake United States technological dominance.

Beijing insists it's the injured party.

"China promised that it would not fire first, but it has been forced to take necessary measures to defend the core interests of the country and its people", the statement said.

The United States slapped a 25 percent tax on $34 billion worth of Chinese imports, and China is retaliating with taxes on an equal amount of USA products, including soybeans, pork and electric cars.

"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.

American companies doing business in China are particularly anxious. -China trade involves parts and supplies, rather than final goods - so the most immediate effect will be felt by the companies making the products, not the consumers finding them on store shelves.

And Beijing's tactics may go beyond tariffs to include arbitrary quarantines and a costly uptick in customs inspections.

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 US a year ago.

Economists say that if the back-and-forth stops there, the overall impact on both economies will be minimal even though some industries will suffer.

The company wants customers to split the cost of the tariff hike, but few are willing, said Tong.

"You have another 16 (billion dollars) 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?" Trump said. "So we have 50 plus 200 plus nearly 300".

"More than 70,000 jobs depend on the Port of Oakland".

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

"Trade war is never a solution", Li said at a news briefing with Bulgarian Prime Minister Boyko Borissov in Sofia.

"Tariffs are beginning to take a toll on American businesses, workers, farmers, and consumers as overseas markets close to American-made products and prices increase here at home", U.S. Chamber of Commerce President and CEO Thomas J. Donohue said.

The White House had previously said it would consult on tariffs on another $16bn of products, which Mr Trump has suggested could come into effect later this month.

China is expected to impose retaliatory tariffs on 545 high-value American exports, such as soybeans, seafood, SUVs and crude oil.

Trump confirmed that the USA would begin collecting tariffs on $34 billion in Chinese goods at 12:01 a.m. Washington D.C. time (0401 GMT) on Friday. President Donald Trump's tariffs are meant to pressure Beijing to reform its trade policies.

'There should be no doubting Beijing's resolve, ' the newspaper said.

Gov. Rick Scott and other Florida officials have kept a fairly low profile as Trump pursues policies he says will even the playing field for US producers. The damage could also spread to other economies, hurting business confidence and prompting companies to delay investments.

Donald Trump's trade war could potentially drag in products from other American trade partners, undermining relations.

On the Chinese side, fallout from the first round of tariffs was seen as tough but manageable.

But China is not the only country to find itself in Washington's crosshairs lately when it comes to trade.

The statement reiterated that China "will unswervingly deepen reform, expand opening up, protect entrepreneurship, strengthen property rights protection, and create a good business environment for global companies in China " - an apparent response to the Trump administration's complaints.

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