Published: Wed, July 11, 2018
Finance | By Claude Patterson

As US tariffs take effect, China says it will retaliate

As US tariffs take effect, China says it will retaliate

Some shipments marked for China were due to be loaded from the U.S. Pacific Northwest, and are likely to get sent elsewhere as exporters scramble to avoid paying the tariff, a U.S. trader said.

The penalties came in response to $34 billion worth of tariffs the Trump administration placed on Chinese products.

Washington imposed tariffs on $34 billion of Chinese imports on Friday and Beijing has said it will retaliate with punitive measures on USA products worth a similar amount, including soybeans, pork and cotton.

Tariffs on US$34 billion worth of Chinese goods, the first of a potential total of US$450 billion, are due to kick in on Friday over United States complaints that China is misappropriating USA technology.

However, China stopped short of actually saying it had implemented tariffs, stirring market confusion. "However, if the United States adopts taxation measures, China will be forced to fight back to defend the core interests of the nation and the interests of the people".

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

Considering that China grows at 6-7% and the U.S. at 2-3%, "we believe the damage would be greater to the USA than on China", Baig says.

WTO spokesman Dan Pruzin has cited concerns expressed on Twitter by WTO Director-General Roberto Azevedo about new "restrictive measures" before 25-percent USA tariffs on $34 billion worth of Chinese imports took effect.

The trade war between the world's two largest economies went into effect on the same day that the Bureau of Labor Statistics released jobs data for June, in which 213,000 new jobs were added, beating estimates of 195,000.

"China now feels it can try to split off the European Union in so many areas, on trade, on human rights", the official said. Asian equities wobbled but also managed to end up.

"There are no winners in a trade war", the chamber's chairman, William Zarit, said in a statement. The Trump administration contends China has deployed predatory tactics in a push to overtake US technological dominance.

Throughout the escalating conflict, China has sought to take the high road, positioning itself as a champion of free trade, but state media ramped-up criticism of Trump on Friday.

The official China Daily newspaper accused the Trump administration of "behaving like a gang of hoodlums".

"Its unruliness looks set to have a profoundly damaging impact on the global economic landscape in the coming decades, unless countries stand together to oppose it".

United States pork was already saddled with duties enacted in an earlier round of the trade row and now faces an extra 25 percent tariff that would raise the total charges up to 62 percent.

Trade war tension between the United States and China has been weighing sharply on the global stock markets over the last couple of days - as the US announced that it would start imposing 25% tariffs on nearly 818 goods imported from China. We will not have to hunt our food with pointy sticks. Trump has said he is prepared to slap taxes on up to $450 billion in Chinese imports, or almost 90 percent of the goods China shipped to the United States previous year. But some products, including thermostats, are lumped into intermediate and capital goods categories.

Foreign companies accounted for $20 billion, or 59 percent, of the $34 billion of exports from China that would be subject to new U.S. tariffs, with USA firms accounting for a significant part of that 59 percent, Gao said.

"Sentiment is holding up well in Asia today, reflecting that tariffs on $34 billion of goods is pretty much priced in", said Frances Cheung, head of Asia macro strategy at Westpac in Singapore.

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