US, China fire first shots in 'largest trade war in economic history'

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US, China fire first shots in 'largest trade war in economic history'

Beijing called it the beginning of "the biggest trade war in economic history" and retaliated with tariffs on billions of dollars worth of USA exports.

Foreign companies accounted for $20 billion, or 59%t, of the $34 billion of exports from China that would be subject to new US tariffs, with USA firms accounting for a significant part of that 59 percent, Gao said.

U.S. exporters stand to lose, as they will miss out on the massive tariff reductions by the Chinese government, which is determined to open its market wider. "As the tariff casualties mount, even many Trump voters are going to ask: When is the master negotiator actually going to negotiate a better trade deal?"

China said it plans to inform the World Trade Organization about the "situation" and work with other countries to defend the multilateral system of free trade, the ministry said.

China today struck back against US President Donald Trump's trade offensive, intensifying the expanding and unpredictable dispute between the world's two largest economies.

"Around 59 percent of products worth US$34 billion subject to additional tariffs are made by foreign firms in China, with American firms making up a considerable part", Gao said.

The president's tariffs, the PIIE's researchers conclude, are "a prime example of 20th century tools aimed at the knowledge-embodying trade flows of the 21st century".

OSA cited an Ohio State University study that suggested these tariffs could lead to a 59 percent decrease in Ohio farmers' net income, and a Purdue University study suggesting total US soybean exports to China could drop by 65 percent. China initially named cranberries as one of the products they would tax, a move aimed at House Speaker Paul Ryan's district in Wisconsin. The drop might reflect a deliberate devaluation by Beijing to signal its "displeasure over the state of trade negotiations", according to a report from the Institute of International Finance, a banking trade group.

Terming the manufacturing of flags for Trump's 2020 bid as "completely normal", he said, "That is trade".

The trade war that erupted Friday between the USA and China carries a major risk of escalation that could weaken investment, depress spending, unsettle financial markets and slow the global economy. On Thursday, Trump warned that the United States may ultimately target over $500 billion worth of Chinese goods, or roughly the total amount that the United States imported from China past year. However, if the other side provokes a trade war by imposing additional tariffs, China will definitely take countermeasures.

Beijing and Washington have held several rounds of high-level talks since early May, but the Trump administration has said it is considering expanding the list of targeted Chinese imports.

Trump ran for the White House on a vow to reverse decades of US policy by scrapping deals that he said put American manufacturers at a competitive disadvantage and by forcing USA trading partners to shrink their trade surpluses with the United States.

Growing jitters over the past few weeks over a stepped-up trading dispute between the world's two largest economies had weighed on the markets well ahead of Friday, when Beijing and Washington launched dueling tariffs on billions in goods.

USA crude rose 1.22 percent to $73.83 per barrel and Brent was last at $77.07, down 0.41 percent on the day.

Friday saw the Trump administration slap tariffs on a wide range of Chinese imports valued collectively at around $US34b a year. Each nation officially imposed $34 billion in tariffs on one another's exports.

The American tariffs are the result of Mr Trump's attempt to protect United States jobs and stop what he calls "unfair transfers of American technology and intellectual property to China". We buy stuff from America, and America is buying stuff from China.

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

"We have always provided the market with a reliable, safe source of food", said Schutz, who has about 1,000 acres of soybeans in White Hall, Illinois, 70 miles north of St. Louis.

The official China Daily newspaper accused the Trump administration of "behaving like a gang of hoodlums".

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