United States and China trade conflict escalates as tariffs strike

11 July, 2018, 21:48 | Author: Regina Silva
  • GETTYThe US President has escalated tensions that could lead to a trade war

Steep American tariffs on Chinese goods worth tens of billions of dollars are due to take effect when the clock strikes twelve on Thursday night, as U.S. President Donald Trump fires the first salvo in a trade war between the world's top two economies.

"Trade war is never a solution", Chinese Premier Li Keqiang said at a news briefing with Bulgarian Prime Minister Boyko Borissov in Sofia before a summit with 16 central and easternEuropean countries.

China is putting pressure on the European Union to issue a strong joint statement against President Donald Trump's trade policies at a summit later this month but is facing resistance, European officials said. The new tariffs come amid rising trade tensions between the two countries.

A $2 billion loss in the pork industry is equal to 30.5 percent of USA pork export sales in 2017, but the loss extends beyond export markets, according to USMEF.

Soybeans are among the USA products, along with orange juice, whiskey, electric cars and others, that are threatened by retaliatory tariffs from China.

Combined with Mexico, which also placed a punitive tariff on US pork - it was 10% from June 5 until yesterday, when it rose to 20% - 40% of total American pork exports now are under retaliatory tariffs, threatening the livelihoods of thousands of USA pig farmers.

Mexico is also studying how to reduce the economic strain of an escalating trade spat, an action that China has also adopted.

Pruzin said the WTO doesn't define "trade war", saying it, "like beauty, is in the eye of the beholder".

The tariffs will make trade more expensive and complicated, and consumers will end up paying a price, Wilson said.

Despite dire warnings about the impact on the U.S., Trump believes the robust American economy can outlast its rivals in the current battle.

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The paper holds that the tariffs will affect several USA sectors, including technology (which Trump says he's trying to protect) while hitting multinational supply chains and firms, as well as harming foreign investment in Chinese firms by allies such as Japan, South Korea, and European Union countries.

As the day dawned across the USA on Friday, a new economic reality dawned with it: The tariffs long threatened against billions of dollars in Chinese goods took effect just at midnight ET while many Americans were sleeping - but Beijing was ready immediately with a wake-up call of its own.

Peter Navarro, the White House trade adviser, has said the United States needs to protect its high-tech "crown jewels" from predatory Chinese practices.

China says its tariffs on United States goods will take effect immediately after Washington's tariffs on Chinese goods kick in.

The biggest impact will likely be seen in sales of the next US crop, which will come to market in September.

Japan's Nikkei 225 index was up 1.2 percent by mid-afternoon Friday while South Korea's Kospi added 0.1 percent. The Shanghai Composite closed 0.5% higher, but ended the week 3.5% lower - its seventh consecutive week of losses.

Disputes between the United States and its trading partners have roiled financial markets ranging from stocks to currencies to commodities for months. The Chinese will respond with tariffs on an equivalent value of US products such as soybeans, seafood and crude oil.

A spokesman for the ministry of commerce in Beijing said: "China promised not to fire the first shot, but in order to safeguard the country's core interests as well as that of the people, it is forced to fight back".

A list of Chinese products will be hit with a 25% tariff from Friday - effectively making them 25% more expensive for U.S. consumers.

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