President Trump Announces $34 Billion Tariffs on Chinese Imports and Products

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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 past year.

Asked on Thursday whether China would target US-funded businesses in China to counter United States restrictions on Chinese products, Chinese Ministry of Commerce spokesman Gao Feng said it was not part of Beijing's plan and, instead, China might compensate foreign businesses for losses from a trade war. The first round of tariffs on China take effect on Friday, and Trump has threatened more.

Gold's boring response to US-China trade war makes it more vulnerable to gyrations in the US yields and the US dollar.

And enduring the pinch isn't going to pay off. Protectionism has historically proven to be destructive for the global economy and won't achieve what the Trump administration is trying to accomplish, said Hsu.

The Trump administration contends that China has deployed predatory tactics in a push to overtake U.S. technological dominance.

It is unclear how long the trade war will last.

Flags of United States and China are placed for a meeting between Secretary of Agriculture Sonny Perdue and China's Minister of Agriculture Han Changfu at the Ministry of Agriculture in Beijing, China June 30, 2017.

The start of the trade war likely confirms the widening rupture between Trump and his own Republican Party, a traditional champion of free trade and big business.

"Once these tariffs start going into effect, it's pretty clear the conflict is real", said Robert Holleyman, former deputy United States trade representative under President Barack Obama and now a partner at law firm Crowell and Moring.

The row has caused turbulence on the world's stock markets and could hurt global trade and growth. Chinese shares slipped further from early deals and pulled Asian markets down, while the yuan currency also weakened.

Chinese buying of soybeans has ground nearly to a halt ahead of the duties, while Chinese farmers worry the penalties and tighter supplies will drive up costs, squeeze margins and ultimately inflate retail prices of pork, the country's top-selling meat. USA tariffs on steel and aluminum imports have provoked retaliatory measures against billions of dollars of American exports. The products, all sold on Chinese e-commerce platforms, ranged from pet food to mixed nuts and whiskey.

The China Daily editorial said there should be no doubting Beijing's resolve and that China would not give into blackmail. "It's having an impact on businesses that are not making capital investment decisions because of the uncertainty of the situation", she said.

On the WeChat messaging platform, "Bull Piano", (link in Chinese) a popular account focused on global finance, said the U.S. action was a crisis, but that China had proven adept at turning crises into opportunities: "Implementing larger-scale reforms and opening up... is our greatest magic weapon to win this trade war". "We have been in trade deficits with almost every country across the globe for years, and the President wants to ensure that that doesn't continue".

Chinese state media has run numerous commentary pieces on the dispute over the past few days criticising the American position.

"Its unruliness looks set to have a profoundly damaging impact on the global economic landscape in the coming decades, unless countries stand together to oppose it".

Washington-based think tank the Peterson Institute for International Economics (PIIE) expects United States tariffs on Chinese goods, which it says particularly target computers and electronics, to hurt multinationals more than China as well as other firms in Asia.

Beijing had said it would retaliate with punitive measures on USA products worth a similar amount, including soybeans, pork and cotton, but it had not officially confirmed on Friday that they had taken effect.

Rob Carnell, chief Asia economist at ING, said: "This is not economic Armageddon".