China vows to 'counterattack' US as trade spat worsens

China vows to 'counterattack' US as trade spat worsens

China's tariffs in one corner of the energy market signal USA shale fields may follow the nation's farms as a target if a trade war escalates.

"Let's absolutely take on Chinese bad behavior, but with a plan that punishes them instead of us".

More than half of the $39 billion US surplus with China in services comes from spending by Chinese citizens on travel to the United States and on attending American schools and colleges, according to investment bank Nomura. He says those interests include protecting US farmers.

"Stock markets in Europe are in the trade war fears have been ramped up", added analyst David Madden at CMC Markets.

"We are not in a trade war", insisted White House chief economic advisor Larry Kudlow, who before joining the administration served as a longtime CNBC host and was seen as a free-trade advocate.

It was the opening salvo in a pattern of escalation that continued this week as Trump slapped first $50 billion in tariffs on China and then said he would seek $100 billion more after Beijing struck back. China's proposed tariffs on agricultural goods would hit USA farmers hard at a time they are already dealing with depressed crop prices and stagnant values for their land.

Trump struck a defiant tone during a speech in West Virginia on Thursday, saying it was time to stop China from "taking advantage" of America.

To minimise the cost to China, regulators picked products for which replacements were available, such as soybeans from Australia or Brazil, said Tu Xinquan, director of WTO studies at the University of International Business and Economics in Beijing.

He says he hopes differences can be mended through negotiations.

"What this is is an attempt to right some of the wrongs with respect to China", he said.

The sense that the trade war was intensifying mounted Thursday when President TrumpDonald John TrumpPruitt directed staff to approve raises for top aides: report Trump's trade rep: Threat of new tariffs "appropriate response" to China GOP senator on tariff threat: Hopefully Trump is blowing off steam because "this is nuts" MORE surprised observers by announcing a possible expansion of US tariffs on Chinese goods by $100 billion.

The Chinese government said it has "heard what the United States has said" about tariffs and is monitoring the USA government's next moves.

China said Wednesday it would levy a 25 percent tariff on about $50 billion of USA imports including soybeans, automobiles, chemicals and aircraft.

"China will take new comprehensive countermeasures to resolutely safeguard the interests of our nation and our people at whatever cost", he said in a statement posted on the Foreign Ministry website.

He added that trade negotiations are impossible, explaining that "under these circumstances, the two sides can not possibly conduct any negotiations about this issue".

The Chinese tariffs are a huge blow to American growers, especially those in Midwestern states that Trump needs to win reelection in 2020. People are surprised, I'm not! That could invite China to retaliate in other ways, such as trimming purchases of U.S. Treasuries, Daco suggested. "So we may take a hit and you know what, ultimately we're going to be much stronger for it". USA trade associations join the protest, warning that any tariffs confrontation with China would be "harmful" to Americans.

Trump spoke about the clash in an interview with the "Bernie and Sid" radio show on 77 WABC Radio that was taped Thursday and aired Friday. He said there "could be a little pain".

Chinese ministry of commerce spokesman Gao Feng pushed back, saying that "under these circumstances, the two sides can not possibly conduct any negotiations about this issue".

On Tuesday, the U.S. trade representative announced a list of roughly 1,300 Chinese goods worth $50 billion annually that would be subject to new United States tariffs, which function as taxes on imports.

Trump hit back again late Thursday by instructing trade officials to consider tariffs on an additional $100 billion in imports.

The soybean tariffs showed China is willing to strike the US where it hurts, with Wednesday's announcement ending weeks of speculation over whether Xi's government would target the commodity that it buys in huge volumes from America and is essential to feed its citizens' growing appetite for pork.

If no solutions are found, tariffs could crimp economic growth in both the USA and China.

"I have also instructed the Secretary of Agriculture, with the support of other members of my Cabinet, to use his broad authority to implement a plan to protect our farmers and agricultural interests", he observed. The Beer Institute - a trade group that represents beer manufacturers - said the 10% aluminum tariff would add $347.7 million in costs for American brewers.



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