Trump's Trade War Officially Begins - Hit & Run

07 July, 2018, 03:04 | Author: Salvatore Jensen
  • China ‘fully prepared’ for trade war with US

Trump has threatened to progressively ratchet up USA penalties to a total of $450 billion in goods - which would represent the lion's share of all of China's exports to the United States.

Beijing has said it will not "fire the first shot" in a trade war with the United States, but has made clear that Chinese tariffs on American goods would take effect immediately after U.S. duties on Chinese goods are put in place.

China's Global Times, a widely-read tabloid published by the ruling Communist Party's People's Daily, said China "does not want to get involved in a trade war", but that it would not back down against the United States.

"We are still many steps away from a full blown trade war", Meyer wrote.

"A little fighting may be the only way the Trump administration clears its mind and allows everyone to sober up", the state-run Global Times said on Friday.

In the countdown to midnight, Chinese State media slammed the White House, and accused the USA of acting like "a gang of hoodlums,"trying to "shake down" other countries - especially China".

The ministry called the U.S. actions "a violation of world trade rules" and said that it had "initiated the largest-scale trade war in economic history". A Chinese government spokesman has said Thursday, July 5, 2018, that Beijing "will not bow in the face of threats and blackmail" on the eve of USA tariff hikes and will defend its interests.

Still, Chinese investors and companies were anxious.

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

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

Li further added that he and workers at his factory are "not so worried" because they have a price advantage over competitors.

Reuters news agency reported that as of Friday morning, when tariffs took effect, some major Chinese ports had delayed clearing goods from the US.

"But the country will encounter more barriers in future development, to which we should learn to adapt", it said. "But it is applying the brakes to a global economy that has less durable momentum than appears to be the case", Rob Carnell, chief economist at ING, said in a note to clients. Clearly, the USA and China are in for a long drawn out trade war.




There was no evidence of any last-minute negotiations between USA and Chinese officials, business sources in Washington and Beijing said.

"Frankly, I don't know what action China could take at the moment that would allow the U.S.to not impose tariffs", the US source said, adding that there was no evidence the two governments had any substantive engagement at the moment that could lead to the shelving of duties.

The United States is set to impose tariffs on US$34 billion of Chinese imports from 0401 GMT on Friday (12:01pm Singapore time) and has warned it may ultimately target over US$500 billion worth of Chinese goods, or roughly the total amount that the United States imported from China previous year. Trump said. "So we have 50 plus 200 plus nearly 300".

Chinese Ministry of Commerce spokesman Gao Feng speaks at a press conference in Beijing, days ahead of an imminent US-China trade war, on July 5, 2018.

Syracuse University economics professor Mary Lovely and researcher Yang Liang found 87% of electronics products to be levied by United States tariffs came from multinationals and joint ventures rather than Chinese firms. "It is not only because of China's large market size, but it is also because the Chinese market is stable, rational, and committed to the rule of law".

Adding to concerns this week was a leaked report suggesting Trump had asked his officials to look at pulling the U.S. out of the World Trade Organisation (WTO) altogether.

"The reciprocal tariffs on US$50bn of goods in both directions will have minimal impact in China", Andy Rothman, an investment strategist at Matthews Asia, wrote in a blog this week.

Faced with President Donald Trump's threat to target USA imports of cars from Europe, German and French government officials plan to meet next week in Paris to coordinate strategy. "The impact on the USA political environment is, however, likely to be far greater", he said.

China was expected to respond dollar-for-dollar but did not immediately release details of the countermeasures, which were expected mainly to target agricultural products in a bid to hurt Trump supporters.

"US measures are essentially attacking global supply and value chains".

"But the tariffs will bring double-lose results".

"After the USA activated its tariff measures against China, China's measures against the United States took effect immediately", Lu Kang said, though he did not elaborate on the details of the measures.

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