China hits back after US imposes tariffs worth $34bn

Ivan Schwartz
July 8, 2018

They kicked in just after midnight ET, which is noon in Beijing.

"After the United States introduced the new tariffs, China's reciprocal measures also immediately took effect", said the spokesman for the Chinese Foreign Ministry Lu Kang.

Trump and his advisers argue the tariffs are necessary to pressure China into abandoning unfair practices such as stealing intellectual property and forcing American companies to hand over valuable technology, reports CNN.

Businesses around the United States told the central bank that spending plans had been scaled back or postponed and they also warned of further adverse effects from the trade conflict, according to a Federal Reserve survey.

Following the announcement of new US tariffs in mid-June, China's Commerce Ministry said that the government would impose an additional 25% tariff on 545 kinds of American products of the same value, including soybeans, automobiles and seafood. "And it's making American companies less competitive", Gonzalez said.

The Commerce Ministry said Trump "ignited the biggest trade war in economic history".

US President Donald Trump told reporters on Thursday that US tariffs on an additional $16bn in Chinese goods are set to take effect in two weeks.

While the initial volley of tariffs was not expected to have major immediate economic impact, the fear is that a prolonged battle would disrupt makers and importers of affected goods in a blow to global trade, investment and growth.

The tariffs on US and Chinese goods come after months of posturing by both countries. "So we have 50 plus 200 plus nearly 300", he said.

President Trump indicated that he will impose tariffs on another $16 billion in imports next week, with the possibility of extending the taxes to $500 billion of Chinese imports. Some economists question the accuracy of the official figures, yet the US Census Bureau shows America bought $376bn more of Chinese goods than the total value of all US goods sold in the Asian country a year ago.

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"We urge the two governments to come back to the negotiation table with the aim of having productive discussions based on achieving results - focused on fairness and reciprocal treatment - instead of escalating the current situation", said Zarit of the American Chamber of Commerce.

China has said it would respond with tariffs on hundreds of US goods, including top exports such as soybeans, sorghum and cotton, threatening U.S. farmers in states that backed Trump in the 2016 US election, such as Texas and Iowa. Chinese exporters have reported USA orders fell off ahead of the tariff hike.

Meanwhile, EU Trade Commissioner Cecilia Malmstrom called the escalation of tariffs between the United States and China "worrying" and "clearly damaging" to the world economy.

Similarly, China is placing 25% tariffs on a host of goods including crude oil and soybeans.

The Trump administration has already threatened to raise the stakes.

"For soybean producers like me, this is a direct financial hit", said Brent Bible, a soy and corn producer in Romney, Indiana.

"We are disappointed that agriculture continues to be placed in the middle of the tariff debate with China", Rohrscheib said.

The ministry called the United States actions "a violation of world trade rules" and said that it had "initiated the largest-scale trade war in economic history". "But it is applying the brakes to a global economy that has less durable momentum than appears to be the case", Rob Carnell, chief economist at ING, said in a note to clients.

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. CNN listed the items impacted on both sides in this story.

OSA cited an Ohio State University study that suggested these tariffs could lead to a 59 percent decrease in Ohio farmers' net income, and a Purdue University study suggesting total USA soybean exports to China could drop by 65 percent.

Other reports by GizPress

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