China Warns US of 'Countermeasures' Against Possible New Tariffs

22 June, 2018, 23:48 | Author: Gerard Cortez
  • Trump escalates China trade war with extra tariffs

"That would lift to 10 per cent if Mr Trump followed through with his threats", Dr Oliver said.

On Friday, President Trump announced plans for tariffs on $50bn worth of imports from China to "encourage China to change the unfair practices", particularly in the fields of technology and innovation.

While there are no winners in a trade war, the United States is focused on protecting USA technology and sees the tariffs on Chinese tech products as a legitimate action. The move was a response to Trump's decision to add a 25 percent tariff on $50 billion worth of Chinese goods last week.

Trump said his move followed China's decision to raise tariffs on $50 billion in US goods, which came after the White House announced similar tariffs on Chinese goods on Friday.

While it is too early to say just how damaging the dispute will be - the first round of U.S. tariffs on Chinese products does not kick in until July 6 - the escalation of threats has brought the world's two largest economies to the brink of a trade war.

He said the action by Beijing "clearly indicates its determination to keep the United States at a permanent and unfair disadvantage, which is reflected in our massive $376 billion trade imbalance in goods". "You can't be promoting and maximizing the production of energy while also imposing tariffs". But last week, Trump unveiled a revised list that included several categories of chips, raising fears that tariffs could impact the United States technology sector. Russian Federation has calculated the damage of its proposed tariffs to be about $537.6 million, while Oreshkin said Tuesday that the first stage of tariffs against the USA would amount to about $93 million.

Sales of American oil, gas and coal to the Asian giant have been increasing, so much, in fact, that the USA energy sector has been running a bilateral trade surplus. The Dow Jones industrial average fell 287.26 points, or 1.15 percent, to close at 24,700.21. Shares of large US companies with significant overseas business were hit especially hard.

The markets reacted badly with China's Shanghai Composite faring the worst in Asia, ending the day down 3.8%.

China's Commerce Ministry on Tuesday criticized President Trump's latest threat of tariffs, calling it an "act of extreme pressure and blackmail".

It gave no details, but China's lopsided trade balance with the United States means Beijing doesn't import enough American goods to stick with its strategy of matching the scale of Trump's tariff increases. Since China's overall exports to the United States a year ago totalled US$430 billion, according to the USA calculation, Beijing said it would retaliate with both "quantitative and qualitative" measures.

Global stocks dropped Monday on concerns over trade as the US and China scheduled the start of tariffs on each other's goods, and a row over migrants threatened the German government.

3 killed as 5.9-magnitude natural disaster rocks Japan's Osaka
Defence troops joined rescue and relief operations in parts of Osaka, along with special vehicles to deliver clean drinking water. On this occasion, no tsunami warning was triggered and nuclear plants in the region were said to be operating normally.

The ministry said it would fight back with "quantitative and qualitative" measures, suggesting Beijing's countermoves could go beyond tariffs, deepening the rift between the two countries.

Shares of large USA companies with significant overseas business were hit especially hard.

The moves could start to meaningfully slow US growth, economists warn.

The Russell 2000 index fell just 0.22% in midday trade as it's made up of small-cap stocks which are closely tied to the USA economy and have less exposure to the worldwide market.

Russia's Economy Minister, Maxim Oreshkin, said the tariffs would target goods of which the Russians already had domestic equivalents. It has yet to say when that might take effect. US bond yields fell in a flight to safety. The White House is finalizing a list of $16 billion in additional goods it will sanction later. Manufacturing iPhones involves nine companies, located across South Korea, Japan, Germany and the USA, and these companies ship the iPhone components to a company located in China, for assembly into final products and then exported to the United States and the rest of the world.

Trump said he hoped the USA could work out a trade agreement with Canada, saying the two countries had a good relationship but that Americans were being taken advantage of. China countered with its own list of $50 billion in imports from America.

According to investing.com, the dollar index fell about 0.15% to the level of 94.27 at 12:30 and the USDJPY slid about 0.74% to 109.73 after President Trump Annulment about the Tariffs.

But Wall Street has viewed the escalating trade tensions with wariness, fearful they could strangle the economic growth achieved during Trump's watch.

"We're going to take care of our American farmers and our manufacturing jobs", Trump said Tuesday.

But Asia's other trade-reliant economies and companies plugged into China's supply chains are anxious they will suffer collateral damage if world trade slows down, hurting global growth and dampening business confidence.

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