Trump escalates trade war against China

Pauline Gross
July 13, 2018

China quickly responded by imposing tariffs on $34 billion in USA products.

The public will have until the end of August to comment on the list before the new tariffs - to be imposed at 10% - come into effect.

In a report submitted ahead of the three day review, China insisted it had "been a strong advocate for free trade" since joining the WTO in 2001 and "comprehensively fulfilled its commitments".

Experts have said that the outlook of the trade war depends on how China responds to the tariffs on its imports. However, China has vowed to match every tariff tit-for-tat, and will likely follow through.

It stems from Washington's complaint that Beijing steals or pressures companies to hand over technology and worries that plans for state-led development of Chinese champions in robots and other fields might erode American industrial leadership.

US Trade Representative Robert Lighthizer said China's retaliatory tariffs were "without any worldwide legal basis or justification".

Chinese retaliation: China has threatened to retaliate dollar-for-dollar if the Trump administration imposes a new round of tariffs.

But China imported only $130 billion worth of goods from the United States in 2017, while the USA imported $505 billion worth from China - making it impossible for them to keep up with the dollar-for-dollar if Trump moves forward with tariffs on the full $200 billion list.

The latest action from the Trump administration was caused by China's retaliation of imposing tariffs on $34 billion in US exports to China and threatening tariffs on another $16 billion.

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Japan's benchmark Nikkei 225 fell 1.2 percent and South Korea's Kospi lost 0.6 percent while Hong Kong's Hang Seng shed 1.3 percent.

Investors fear an escalating trade war between the world's two biggest economies could hit global growth.

ENERGY: Benchmark U.S. crude gained 54 cents to $70.92 per barrel in electronic trading on the New York Mercantile Exchange while Brent crude, used to price worldwide oils, gained 85 cents to $74.25 per barrel in London.

China's Commerce Ministry slammed the latest U.S. threat as a "totally unacceptable" escalation of their dispute and promised to protect its "core interests".

Although it was not a direct reaction to the new move from Trump's administration, the official English-language newspaper China Daily said in an editorial that Beijing had to stand up to Washington.

TARIFF THREATS: The Trump administration's list includes vacuum cleaners, furniture and vehicle and bicycle parts but not USA -branded smartphones and laptops.

Bob Corker (R-Tenn.) said before what he called a "test vote" to see how willing Congress might be to push back against Trump's use of a law that gives him broad authority to impose tariffs in an effort to protect national security.

US Senate Finance Committee Chairman Orrin Hatch described the move was "reckless". "Too many jobs and livelihoods are at stake to continue escalating this trade war". But Trump hasn't backed down, arguing that China's unfair trading practices are hurting American workers.

SUN: I think essentially the Chinese have a hard time understanding whether President Trump is looking for a fight or he is looking for a deal.

Other reports by GizPress

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