China warns of 'counterattack' as United States tariffs take effect

China warns of 'counterattack' as United States tariffs take effect

Minutes later, China's Commerce Ministry issued a statement, saying that "the United States has violated World Trade Organization rules and waged the biggest trade war ever in economic history".

Another $16 billion of goods could follow in two weeks, Trump earlier told reporters, before suggesting the final total could eventually reach $550 billion, a figure that exceeds all of USA goods imports from China in 2017. "So we have 50 plus 200 plus nearly 300", he said.

Why is Trump targeting China with tariffs?

But in response to a 25% tariff on $50 billion worth of Chinese goods imposed by the Trump administration, Beijing retaliated by slapping tariffs worth $34 billion on 545 American goods - including soybeans.

Friday's development comes as Europe, Mexico and Canada - some of America's closest allies -- are engaged in their own trade battles with the U.S.

Importers of American retail goods hit by higher Chinese duties were reluctant to pass the costs on to consumers for now. He said that would rise to a full 4 per cent of the global total if Washington, Beijing and other governments follow through on tariff threats. American officials worry US industrial leadership will be eroded by Chinese plans to create tech champions in fields including robotics, biotech and artificial intelligence.

In April, the White House instructed the United States Trade Representative to consider $100 billion in additional tariffs against China.

"The tariffs are aimed at patent-intensive industries that rely on global supply chains, disadvantaging American producers and harming USA allies operating in the region", the PIIE analysis concludes.

Following the announcement of new US tariffs in mid-June, China's Commerce Ministry said that the government would impose an additional 25% tariff on 545 kinds of American products of the same value, including soybeans, automobiles and seafood.

Hours before Washington's deadline for the tariffs to take effect, US President Donald Trump upped the ante, warning that the United States may ultimately target over $500 billion worth of Chinese goods, or roughly the total amount of US imports from China past year.

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Trump and his advisers argue the tariffs are necessary to pressure China into abandoning unfair practices such as stealing intellectual property and forcing American companies to hand over valuable technology. Reducing the deficit would signal that the global economy shouldn't be investing in US debt.

"After the U.S. activated its tariff measures against China, China's measures against the United States took effect immediately", said Lu Kang, spokesman for the foreign ministry.

US Customs and Border Protection officials were due to collect 25 percent duties on a range of products, starting on Friday, including motor vehicles, computer disk drives, parts of pumps, valves and printers and many other industrial components.

The lists of goods to be hit by tariffs have been updated several times by both administrations. But some products, including thermostats, are lumped into intermediate and capital goods categories.

Chinese buying of soybeans has already ground almost to a halt ahead of the duties.

"Such tariffs are typical trade bullying, and this action threatens global supply chains and value chains, stalls the global economic recovery, triggers global market turmoil, and will hurt more innocent multinational companies, enterprises, and consumers", the statement said.

"Trade war is never a solution", Chinese Premier Li Keqiang said at a news briefing with Bulgarian Prime Minister Boyko Borissov in Sofia before a summit with 16 central and eastern European countries.

China says it may hike tariffs on United States pork, other goods.

"Combining this with China's promise to retaliate against US products and agricultural commodities only further erodes the benefits of last year's tax reform, hurting the entire USA economy", Slater said. Ford said it would "continue to monitor the situation as it evolves". "Changes in trade policy could cause us to have to question the outlook", he said during a panel talk in Portugal.

If enacted, the import duty would make USA oil less competitive than other crudes, likely causing a decline in Chinese purchases and forcing US oil firms to find other buyers. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. This article is strictly for informational purposes only. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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