USA tariffs take effect, China warns of 'counterattack'

USA tariffs take effect, China warns of 'counterattack'

The new trade regulations imposed by the Trump administration, which levy a 25 percent tariff on $34 billion worth of Chinese imports to the us, have "violated [World Trade Organization] rules and launched the largest trade war in economic history to date", China's Ministry of Commerce declared in a statement Friday.

The White House said it would consult on tariffs on the other $US16b of products, and would apply these later.

Trump didn't back down, but rather raised the stakes with the threat of even more tariffs on China.

Beijing has accused the USA 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.

Beijing has accused the USA of starting the "largest trade war in economic history".

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".

China's tariff list is heavy on agricultural goods such as soybeans, sorghum and cotton, threatening USA farmers in states that backed Trump in the 2016 U.S. election, such as Texas and Iowa. There are unlikely to be any winners in a trade war.

When Donald Trump became US President he promised to "Make America Great Again".

China's reciprocal tariffs took an aim at soybeans, which accounted for $14 billion of USA exports into the Asian country a year ago, the Wall Street Journal reported. China did not specify what items would be targeted with retaliatory tariffs, but it has previously threatened to hit American agricultural products such as pork and soy beans.

Farmer John Duffy loads soybeans from his grain bin onto a truck before taking them to a grain elevator on June 13, 2018 in Dwight, Illinois. So the ongoing trade war is the culmination of Trump's trade protectionism.

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"The $50-billion trade war will slow down China's GDP growth by 0.2 percentage points", Ma told Xinhua, China's official news agency. Trump said Thursday that another $16 billion of tariffs are expected to go into effect in two weeks, before ratcheting up the stakes to warn that measures totaling $500 billion in Chinese goods could soon come into force. Others will likely decide to hold back on hiring.

A United States court on Friday imposed the maximum US$1.5 million fine for theft of trade secrets by the Chinese company Sinovel in a case that typified Washington's complaints about Beijing's conduct.

Chinese Commerce Ministry spokesman Gao Feng said the proposed U.S. tariffs would hit many American and foreign companies operating in China and disrupt their supplies of components and assembly work.

US crude rose 1.22 percent to $73.83 per barrel and Brent was last at $77.07, down 0.41 percent on the day.

And if Trump extends the tariffs to up to $550 billion in Chinese imports, consumers won't be able to avoid getting caught in the crossfire: The taxes would hit products like televisions and cellphones.

China's commerce ministry, in a statement shortly after the United States deadline passed at 0401 GMT on Friday, said it was forced to retaliate, meaning imported U.S. goods including cars, soybeans, and lobsters also faced 25 per cent tariffs. "The Trump Administration's goal of opening closed markets and establishing reciprocal trade overseas has alternatively been met with reciprocal retaliatory tariffs and complaints to the WTO".

Friday's China tariff volley fuelled fears a prolonged battle would hurt global trade, investment and growth.

The official China Daily newspaper accused the Trump administration of "behaving like a gang of hoodlums".

China said it would respond with measures of a "corresponding number and quality" if the U.S. produced a list of products that could be hit. Trump's attempt to use the steel and aluminum tariffs to pry concessions from the Mexicans and Canadians proved futile.

The Trump administration is confronting China over tactics it says include stealing technology and pressuring foreign companies to hand it over as the price of admission to China's vast market.

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