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China retaliates against US tariffs, escalates trade war

07 April, 2018, 01:10 | Author: Sara Gill
  • Trump pushes back against market fears of trade war

Last month, Mr Trump said that "trade wars are good".

Trump has also pledged to narrow the U.S. trade deficit with China, which Washington estimated at $337.2 billion a year ago, a record for any country. Trump has upped the ante in the potential trade war with China.

China is the world's top copper consumer, and earlier this week it announced retaliatory tariffs on $50bn (£36bn) worth of U.S. goods, including vehicles and soybeans.

A MOC spokesperson made the statement after the USA administration announced a proposed list of products subject to additional tariffs, which covers Chinese exports worth 50 billion US dollars with a suggested tariff rate of 25 percent.

Three months after taking oath as the president, Trump, who always had a strong opinion on China's trade competition with the U.S., started an investigation into steel imports into the US.

"It's only more or less 10 percent of overall imports from China", Kamiyama said. The government later estimated that such theft by China made the United States lose between $225 billion and $600 billion each year.

Donald Trump ups the ante by proposing up to 25% levies on about US$50 billion worth of 1,333 high value-added items from China such as medicines and medical equipment, machine tools and chemicals, and automobile parts.

"It must be said, we have been forced into taking this action", said Wang Shouwen, China's deputy commerce minister. In the US, banks and retailers made some of the biggest gains.


China's economy has become less dependent on selling goods overseas in recent years, which is likely to blunt the effect of the United States tariffs, according to analysts for S&P Global Ratings.

The potential trade war between the USA and China has the global economy on edge, as escalating tariff measures on both sides threaten economic stability and the sectors that rely most on global growth.

Hours later, China, the largest consumer of American goods, reciprocated with its own tariffs against 106 USA products, including soybeans, wheat, tobacco, corn, cotton and beef. "I think that's bad for everybody", said Smith. US soybeans, for example, account for over a third of China's total soybean imports.

The trade tensions brewing between the world's two largest economies hit global markets, with shares of industrial companies with exposure to Chinese markets, such as Boeing Co and Deere & Co, among the hardest hit.

ANALYST'S TAKE: "With the expectation for talks to now take over, it does look like we have a long drawn out process ahead of us".

The Final Word: Trade-war risks have become a real threat to the global economic order. The reading offered yet another bullish sign for investors that the US economic recovery was still on track.

The additional tariffs initially applied to 128 products but the list has since been expanded to include an additional 106 products.

Neither country has actually implemented the hard-hitting tariffs they are proposing, and the White House has attempted to downplay trade war concerns.

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