China Declares Trade War Launched After Trump Unveils $50B Tariffs

CT6 Cadillac during the Consumer Electronics Show Asia 2018 in Shanghai China on Friday

China Declares Trade War Launched After Trump Unveils $50B Tariffs

China's Commerce Ministry said it would respond with tariffs "of the same scale and strength" and that any previous trade deals with Trump were "invalid". But Trump also rails against the U.S.'s large trade deficit with China and China's high tariffs on certain goods.

A statement from the Chinese Commerce Ministry gave no details of what US goods would be affected, but China announced possible targets in April including soybeans, light aircraft, orange juice, whiskey and beef.

The prospect of a U.S.

Global industrials Boeing and Caterpillar fell 1.3 percent and 2 percent, respectively.

On its website, it said: "China is unwilling to have a trade war, but the Chinese side has no choice but to strongly oppose this, due to the United States' myopic behaviour that will harm both parties".

It added, "There is no victor in a trade war, and the USA instigation of a trade war is extremely destructive to global trade, economic globalisation, multilateral trade systems and global production supply chains".

U.S. Customs and Border Protection will begin to collect tariffs on the first $34 billion worth of Chinese imports on July 6. The new list includes more agricultural produce, including dairy, alfalfa and seafood, than a initial group published in April.

The White House had set a June 15 deadline for announcing the full list of items that will see a tariff imposed, focusing on areas of China's industry such as aerospace, robotics and machinery.

The administration also is targeting another 284 Chinese products, which the administration says benefit from China's aggressive industrial policies, worth $16 billion a year but won't impose those tariffs until it collects public comment.

Nancy Johnson, executive director of the North Dakota Soybean Growers Association, cautioned that the tariffs don't go into effect until early July. Even though China and the USA probably want to negotiate, "the risks are high and the tariffs could well be implemented before the issue is resolved".

The U.S. tariffs are designed specifically to punish China for forcing American companies to hand over technology in exchange for access to the Chinese market.

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"China and the USA have conducted several rounds of consultations on economic and trade issues in an effort to resolve differences and achieve a win-win situation". The Chinese yuan traded at a five-month low against the dollar, however, according to Reuters.

China in April already put punitive duties on 128 United States goods, including pork, wine and certain pipes in response to global USA tariffs on steel and aluminium imposed by Trump the month before.

A further descent into an all-out trade war loomed, with the U.S. vowing to "pursue additional tariffs if China engages in retaliatory measures".

Beijing and Washington have held three rounds of high-level talks since early May that have yet to yield a compromise.

Wall Street has viewed the escalating trade tensions with wariness, fearful they could strangle US economic growth and undermine the benefits of the tax cuts Trump signed into law past year.

Louis Kuijs, head of Asia economics at Oxford Economics, said that the back-and-forth trade measures would be a modest drag on economic growth, but, despite the relatively minor hit the tariffs, still make a difference.

China's government urged the United States to back down from its current course of action.

An old Wall Street saw says "Buy on the sound of cannons, sell on the sound of trumpets", meaning stock traders see wars as buying opportunities. Friday's actions are only aimed at China. But the White House announced at the end of May that the tariffs would move forward despite the deal. But he said that underlying strong economic fundamentals in the United States would dampen the market impact.

Trump previously imposed tariffs on steel and aluminum imports from Canada, Europe, Japan, Mexico, a move that drew strong rebukes from USA allies.

That's why dozens of businessmen and businesswomen from across the country came to Washington, D.C., last month to beg the administration to abandon its ill-conceived plan to tax Chinese imports.

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