Economy

Trump unleashes trade war with tariffs on China

Trump unleashes trade war with tariffs on China”

U.S. tariffs on $34bn in Chinese imports took effect as a deadline passed on Friday, and with Beijing having vowed to respond immediately in kind, the world's two biggest economies took a high-stakes turn towards all-out trade conflict.

Mr. Sheng added that the USA has maintained a services trade surplus with China for a long time, which increased incomes in the US and also promoted employment.

What Our Economists Say As a candidate in 2016, Donald Trump won support with a promise to redress an unbalanced trade relationship with the rest of the world.

President Donald Trump said more than $500 billion in Chinese products could ultimately be penalized.

Although Chinese Premier Li Keqiang said on Friday that no one will win by fighting a trade war, China pushed to implement countermeasures against US tariffs. The additional taxes will ripple through supply chains, forcing companies in both countries to decide whether to take a financial hit themselves or pass it along to consumers.

"There should be no doubting Beijing's resolve", the newspaper said.

"Our baseline forecast assumes only a modest further escalation in the trade "war" this summer", Bank of America Merrill Lynch said in a Friday note. "That's the nature of trade wars as well, and while no one is likely to win this confrontation, both sides could certainly lose". Trump has added to the tension by threatening new tariffs on cars. Asian equities wobbled but also managed to end up. Some analysts such as Singapore-based DBS say the USA economy could suffer more than China's, as United States levies could affect American firms with investments in the country and Washington is also involved in other trade conflicts. We buy stuff from America, and America is buying stuff from China."He further said all the flags being made have "Made in China" tags on them". The products, all sold on Chinese e-commerce platforms, ranged from pet food to mixed nuts and whiskey. China hit back immediately via duties on USA shipments including soybeans and automobiles.

Some Chinese ports had delayed clearing goods from the United States, four sources said on Friday.

US Customs and Border Protection said in a notice it would begin collecting the 25 per cent duties on 818 product lines identified in June by the US Trade Representative's Office.

Some other media were more circumspect, with the English-language China Daily yesterday calling on China to be confident but not arrogant.

Stocks closed higher on Thursday as technology shares rose, but investors remained on edge as the USA prepared to slap tariffs on goods imported from China.

This trade war will hit American agricultural exports such as pork and soybean hard, but if President Trump ups the ante, products like televisions and other household goods could also be hit, meaning consumers will face higher prices, Matthew Shay, president of the National Retail Federation, told the Associated Press.

"Then you have another 16 [billion] in two weeks and then as you know we have 200 billion in abeyance and then after the 200 billion we have 300 billion in abeyance. OK? Okay? So, we have 50 plus 200 plus nearly 300", he told reporters on Thursday.

The direct impact on China's economic growth in 2018 is estimated at 0.1-0.3 percentage points while the drag on its export growth is expected to be 1 percentage point.

That would bring the total of targeted Chinese goods to potentially $550 billion - more than the $506 billion in goods that China actually shipped to the United States previous year.

"This is not economic Armageddon".



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