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Beijing is gearing up for a long, bitter trade war with Washington

07 July, 2018, 03:06 | Author: Lawrence Cooper
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An official at a company in Shanghai that handles customs clearance for importers said to Reuters that the port of Shanghai is said to have put on hold clearing some U.S. imports through customs.

The tariffs mark some of the first material movements toward a trade war between the world's largest economies.

And Chinese authorities quickly retaliated with equivalent tariffs on $34 billion worth of imported USA goods - previously promised as ranging from vehicles to soybeans, beef and other agricultural products.

The price of US soybeans has plunged 17 percent over the past month on fears that Chinese tariffs will cut off American farmers from a market that buys about 60 percent of their soybean exports.

But Trump has said his administration will respond to retaliation from Beijing with much bigger waves of tariffs, raising the prospect of worsening tit-for-tat reprisals. 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. Trump said. "So we have 50 plus 200 plus nearly 300".

The Chinese authorities have imposed 25% duties on imports from the United States worth about $34 bln a year, according to a statement by the Main Customs Administration of the People's Republic of China.

"China apparently has no intention of changing its unfair practices related to the acquisition of American intellectual property and technology", Trump said when announcing the $200 billion threat.

"There are no winners in a trade war", the chamber's chairman, William Zarit, said in a statement.

China's commerce ministry called the US actions "a violation of world trade rules" and said that it had "initiated the largest-scale trade war in economic history".

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Friday's long-expected tariff volley fuelled fear that a prolonged and escalating battle would deal a blow to global trade, investment and growth, while also damaging U.S. farmers who stand to lose revenues and potentially driving up food prices in China.

China has promised to immediately hit back with tariffs of "equal scale, equal intensity" on American soybeans, corn, wheat, rice, beef, and poultry.

United States carmaker Ford Motor Co said on Thursday it has no plans to hike retail prices of its imported Ford and Lincoln models in China, despite the steep additional tariffs on imported U.S. vehicles set to come into play on Friday.

"Such tariffs are typical trade bullying, and this action threatens global supply chains and value chains, stalls the global economic recovery, triggers global market turmoil, and will hurt more innocent multinational companies, enterprises and consumers". "It's very hard to see this happening in the current environment".

A member of China's central bank monetary policy committee, Ma Jun, said today that the first punches will have a "limited impact" on the Chinese economy.

Asked whether USA companies would be targeted with "qualitative measures" in China in a trade war, Gao said the government would protect the legal rights of all foreign companies in the country.

Economists have for months warned of the potential damage to the United States and global economies from aggressive trade policies and protectionism, which would raise prices and upend global supply chains.

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 whose members, while critical, have so-far shrunk from curtailing the White House's trade powers.

Nonetheless, despite the urging of business groups and lawmakers to negotiate a truce, there was little sign Friday that the two sides would reach a compromise anytime soon.

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