US, China trade war begins

Andrew Cummings
July 8, 2018

The United States and China have launched what Beijing called the "biggest trade war in economic history," imposing tariffs on billions of dollars of each other's goods in a potentially harmful fight over technology that could soon escalate.

With additional tariffs on Chinese products worth US$34 billion made effective on Friday, the United States has taken a unsafe step that will take a toll on its own economy.

"I sort of feel betrayed by President Trump because he got elected through the strength of the farm states ... but now he's done everything it seems to hurt our profit, the farmers' bottom lines by even just his rhetoric on tariffs", he said.

Two of the largest economies in the world have descended into a trade war, after China followed up on its threat to retaliate against the $34bn (£25.7bn) U.S. tariffs. The company blamed it on the trade dispute between the USA and China, saying the tariffs will result in "fewer than expected SUV sales and higher than expected costs".

"There are no winners in a trade war", said William Zarit, chairman of the American Chamber of Commerce in China.

Amidst a trade war between the United States and China, a Chinese company is manufacturing flags for President Donald Trump's 2020 re-election campaign, a media report said here.

The president's tariffs, the PIIE's researchers conclude, are "a prime example of 20th century tools aimed at the knowledge-embodying trade flows of the 21st century".

The overall monthly USA goods and services trade deficit declined to $43.1 billion in May, from $46.1 billion in April.

However, some firms like to be hit by the trade war posted declines.

The report, which shows that unemployment has dropped, also included some numbers that might not be worth the all-caps tweet, including slowed hiring in small businesses and a lack of qualified applicants in some fields, owing, possibly, to wage stagnation. China responded with its own set of tariffs on USA pork and soybeans, among other goods. The move prompted China to retaliate the same way.

But, soybean farmers are anxious that if these tariffs stick, they will have far-reaching impacts on the state's economy. But the thing is some say the trade war started this morning, and in a war, it's not always calm or controllable or rational.

White House trade officials insisted the USA economy's recent growth enables it to withstand more pain than its rivals if the war escalates further.

President Donald Trump said he is considering tariffs that could affect up to $550 billion of Chinese goods, more than the total amount China exported to the United States previous year.

There did not appear to be any direct guidance to hold up cargoes, but some customs departments were waiting until they had received official instructions from the central government on whether to start collecting the hefty new import tariffs on hundreds of products, the sources said.

Beijing has vowed to respond immediately with an equal amount of tariffs of its own against U.S. autos, agricultural and other products.

Iowa soybean farmer Ron Heck on the impact of USA trade tensions with China on farmers in America. That study also found US soybean production could decline by 15 percent. Beijing also accused Washington of breaching trade rules of the World Trade Organisation (WTO).

Beijing slapped additional 25 percent tariffs on 545 USA imports totaling $34 billion - including automobiles and agricultural products such as soy beans and beef - as part of a retaliatory plan involving 659 items worth $50 billion.

The tariffs are in retaliation to tariffs imposed on Chinese imports by the Trump administration. "It's borderline if we're going to make it or not", he said.

The clash with China comes as the Trump administration is also fighting over trade with American allies such as Canada and the European Union.

Trump told reporters on the Thursday Air Force One trip to Montana, "Ok?"

The Trump administration is confronting China over development tactics it says include stealing technology or pressuring foreign companies to hand it over.

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