China trade battle kicks off; markets take it in stride

China trade battle kicks off; markets take it in stride

China trade battle kicks off; markets take it in stride

China declared Friday the "biggest trade war in economic history" is now under way after Beijing implemented retaliatory tariffs on some imports in response to US duties taking effect.

As the trade war with China - caused by tariffs demanded by Donald Trump - heats up, the editors of the Wall Street Journal have taken the president to task, sarcastically mocking him as a "master negotiator" who has yet to negotiate any deals while causing damage to the US economy.

Beijing's taxes hit US -made aircraft, cars, computer chips, fuel, pork and soybeans.

Touching on China's massive trade surpluses with the United States, Trump told his audience, "They've been killing us".

"We are forced to make a necessary counterattack to protect the core profits of the country and the interests of people", it said in expressing readiness to take reciprocal measures against the United States. The Dow Jones Industrial Average shed 1,000 points from a high in mid-June, while the S&P 500 has also retreated notably since concerns about a trade war started to loom.

Beijing's commerce ministry, in a statement shortly after the U.S. deadline passed on Friday, said the world's No. 2 economy was forced to retaliate by placing jacked-up 25 percent tariffs on United States cars, soybeans and lobsters.

United States President Donald Trump on Thursday said that the first wave of tariffs of Dollars 34 billion in goods would be swiftly followed by another penalty on Chinese goods worth Dollars 16 billion. "Of the original $50 billion in tariffs on China, items including lithium batteries, navigation devices, disk drives and circuit board components will be affected - hitting $15.2 billion worth of Chinese imports".

Retaliatory tariffs from China could lead to a 59 percent decrease in OH farmers' net income within six years, a group representing Ohio's soybean industry said.

China's retaliatory tariffs of equal scale went into force immediately after Washington fired the first shot.

The White House said it would consult on tariffs on another $16bn of products, which Mr Trump has suggested could come into effect later this month. That conjures the image of this being a cool, calm, collected game of chess on both sides: Washington and Beijing.

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China's customs authority announced that additional tariffs for some imports from the United States worth the same amount, including agricultural products, vehicles and aquatic products, also took effect on the same day.

China's commerce ministry said it had lodged a new complaint with the World Trade Organization (WTO).

During an official visit to Bulgaria, China's No. 2 leader, Premier Li Keqiang, said "no one will win by fighting a trade war, yet China will take countermeasures in the face of unilateral moves".

Judging from developments between the world's two largest economies, the trade row is more likely to get worse and worse with no quick fix in sight.

Economists say that if the back-and-forth stops there, the overall impact on both economies will be minimal even though some industries will suffer.

However, some firms like to be hit by the trade war posted declines.

Analysts said this was the quiet before the storm, with USA exports likely to fall off in the third quarter as both sides feel the effects of worsening trade relations.

In response, China immediately slapped an identical tariff on US imports of the same value, with aquaculture products, automobiles and soybeans the hardest hit.

He said exports often consist of pig parts not in demand domestically, such as offal, and that China's huge population and demand for pork represents an opportunity for USA producers.

After that, the hostilities could intensify: Trump said Washington is ready to target an additional $200 billion in Chinese imports - and then $300 billion more - if Beijing does not yield. Trump has already imposed duties on foreign steel and aluminium imports, drawing a response from the European Union and Canada which fret he may go after automakers next.

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