USA tariffs take effect, China announces retaliation

Daniel Fowler
July 7, 2018

The tariffs will hurt the American high-tech companies that Trump is trying to protect from intellectual property theft as it becomes increasingly hard for those companies to do business in China, she said. The oilseed is the top agricultural commodity that the US ships to China by far and is among the largest products for overall exports.

President Donald Trump imposed a 25% tariff on more than $34 billion worth of Chinese exports to the U.S. on Friday.

China is the biggest buyer of USA soybeans, importing more than $12.4 billion worth of the oil seed in 2017.

"The chances are slim for China and the U.S.to reach an agreement on trade issues, and trade war worries will be a long-term uncertainty for at least the next two years", said Yan Weixiao, an analyst with Founder Securities, adding that things could be "dangerous" for Chinese stocks.

Delays started at midnight local time on Thursday as agents waited for official go-ahead from the central government to enforce the new tariffs, he said. Fall is the biggest season for American soybean farmers.

China's commerce ministry earlier Friday accused the U.S. of launching the "largest trade war in economic history", saying it could trigger "global market turmoil".

Economists have warned escalating trade frictions could throttle global growth and strike at the heart of the world trading system, causing shockwaves across the planet.

The Shanghai Composite Index ended up 0.5 percent after flirting with two-year lows in the morning session.

Al Jazeera's Rob McBride, reporting from Beijing, said that while the $34bn in goods "doesn't equate to a huge amount given the size of the world's biggest economies, it is more the gesture and what is might lead to".

A commodities trader in eastern Shandong province was told by customs at a major northern port that they have slowed the clearance of goods from the United States on Beijing's list.

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Beijing has announced changes this year including easing limits on foreign ownership in insurance and some other fields.

Mr Trump said: "You have another 16 [billion dollars] in two weeks, and then, as you know, we have $200bn in abeyance and then after the $200bn, we have $300bn in abeyance. OK?"

After that, the hostilities could intensify: Trump said the U.S.is ready to target an additional $200 billion in Chinese imports - and then $300 billion more - if Beijing does not yield to US demands and continues to retaliate.

In April, the White House instructed the United States Trade Representative to consider $100 billion in additional tariffs against China. But rules on auto manufacturing and other industries require companies to work through state-owned partners, obliging them to share know-how with potential competitors.

The U.S. -China trade war could have global implications.

China has threatened to respond with tariffs on hundreds of US goods, including top exports such as soybeans, sorghum and cotton, threatening USA farmers in states that backed Trump in the 2016 USA election, such as Texas and Iowa.

And enduring the pinch isn't going to pay off. Protectionism has historically proven to be destructive for the global economy and won't achieve what the Trump administration is trying to accomplish, said Hsu.

'There should be no doubting Beijing's resolve, ' the newspaper said.

Russian Federation says USA tariffs on steel and aluminium, introduced in March, will cost its companies more than half a billion dollars.

The American Chamber of Commerce in China appealed to both sides to negotiate.

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