Donald Trump raises stakes as US-China trade war begins

Daniel Fowler
July 9, 2018

The U.S. has imposed 25 per cent duties on $34 billion United States in Chinese products. They kicked in just after midnight ET, which is noon in Beijing.

"After the United States unfairly raised tariffs against China, China immediately put into effect raised tariffs on some U.S. goods", said Foreign Ministry spokesman Lu Kang.

Dennis Riggs, 63, who farms south of Sidney, said numerous investments he has been wanting to make on his farm are now "out of the question", because China launched its own set of tariffs on American goods like soybeans, corn, pork and poultry in retaliation.

Beijing insists it's the injured party.

In describing its retaliatory move against the U.S.as the "largest-scale trade war in history", China said it was forced to take counter-measures to defend the country's interests.

Other analysts added the political relationship between Washington and Beijing is expected to worsen, possibly affecting security policy in Asia, as the United States and China have been at odds over Taiwan and the South China Sea.

The government said previously it would hit more than 500 U.S. export items - including cars and major agricultural goods such as soybeans and meat - worth the same as the Chinese products targeted by the United States.

Until then, Heck said the only option for farmers is to wait and see whether the world's two biggest economies settle the tariff discussions. China has said it would respond in kind with additional tariffs on USA goods, such as machinery and plastics.

The big question is how far the hostilities between Washington and Beijing will go. The president said US tariffs on an additional $16 billion in Chinese goods are set to take effect in two weeks.

In the run-up to Friday, there was no sign of renewed negotiations between US and Chinese officials, business sources in Washington and Beijing said. On Thursday, he suggested the possibility of tariffs on nearly $500 billion more of Chinese goods. He added the U.S. is ready to target an additional $200 billion, and then $300 billion more should Beijing retaliate. "What we will likely see happen in the short-term is apples that were destined for export markets will instead overhang the USA market", she said.

And of course a year ago, at the Global Economic Forum in Davos, Switzerland, Chinese President Xi Jinping offered up a rousing defense of globalization - and a (rather presumptuous) suggestion that China, rather than the United States, is the new champion of free trade.

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

With these new protectionist policies, President Trump's main goal is to reduce the flow of Chinese imports and push American consumers to buy domestically-made products.

"If this ends at $34 billion, it will have a marginal effect on both economies, but if it escalates to $500 billion like Trump said then it's going to have a big impact for both countries".

President Donald Trump is fighting trade battles in all directions, not just with China.

But the massive scale of Trump's suggested new US tariffs - 10 times the initial $50 billion - would blow any such modest predictions out of the water.

"The dynamic is different from anything we've seen", said Boughton.

Lobbying efforts are now focused on convincing President Donald Trump to not put tariffs on a second list of mainly energy, plastics and chemicals worth about $16 billion, said industry officials.

"If we didn't have a tariff and we could sell on a free market, you know, the Chinese people would pay us $8.50, but if you got a tariff, a 25-percent tariff on that, it brings that price back up to $10 dollars", said Cannatella. On the other hand, it is expanding restrictions on investments.

Trump has said that trade wars are "good and easy to win". "At that point, the U.S. will be more interested in negotiations, and the Chinese side will also want to come to the table".

The Trump administration contends China has deployed predatory tactics in a push to overtake United States technological dominance.

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