U.S. and China Officially in a Trade War over "Unfair Trade Practices"

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China, as promised, officially announced new retaliatory tariffs on US goods on Saturday, claiming that the Trump administration had "launched a trade war" with Friday's imposition of 25 percent tariffs on some $50 billion worth of Chinese exports.

A set of retaliatory tariffs announced by China on Friday includes a plan to tax imports of American lobster, potentially jeopardizing one of the biggest markets for Maine's signature seafood.

The duties, which will make Chinese goods more expensive for U.S. customers, were imposed "in light of China's theft of intellectual property and technology and its other unfair trade practices", the White House statement said. "We will immediately launch tariff measures that will match the scale and intensity of those launched by the United States", the ministry said, announcing its own 25 percent tariffs on $50 billion of USA exports.

"We will immediately launch tax measures of equal scale and equal strength", the commerce ministry said in a statement on its website which also called on other countries to "take collective action" against this "outdated and backwards behaviour". "All the economic and trade achievements previously reached by the two parties will no longer be valid at the same time".

The China trade offensive is only one side of Trump's multi-front battle with all major USA economic partners. 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. imports a LOT more Chinese goods than the Chinese import in regards to American goods and its easy to see above.

On Capitol Hill, influential Texas Republican lawmaker Kevin Brady, chairman of a House tax legislation committee, said he was "alarmed" by the tariffs which he said exposed USA industries to "devastating retaliation".

China has noticed the USA statement which said Washington would continue to impose additional tariffs if China takes retaliatory measures.

"Even in a favorable scenario, there is no reason to think the dispute will be resolved over the summer", analysts with Eurasia Group, a political risk advisory firm, said in a report ahead of the latest round of tariffs. "We will continue to engage with leaders in both countries to urge a productive dialogue to resolve trade differences, highlighting the mutual economic benefits of a strong and prosperous aerospace industry", Boeing said. The $50 billion in tariffs will likely mean just a tenth of a percentage point hit "at most" on annual US economic growth and a similar jump in overall consumer prices, according to data from Barclays, the British bank.

China responded to US tariffs announced Friday morning with a promise to impose reciprocal levies on a range of American products, including agricultural products, cars and seafood.

The U.S. had earlier announced tariffs on steel and aluminum imports from Canada, Japan, Mexico and Europe.

"The mentality of the Trump team is a little odd", said Andrew Polk, co-founder of research firm Trivium China in Beijing.

In a statement Friday, Trump pledged additional tariffs if China follows through on the threat to fight back.

Read Supply Chain Caught in Crossfire of U.S.

The effective date of the tariffs on the remaining $16 billion of USA goods will be announced later, according to the commerce ministry.

As Reason has noted repeatedly, tariffs are unlikely to be an effective tool in getting China to stop infringing American intellectual property.

Mr Trump has already slapped tariffs on steel and aluminium imports from Canada, Mexico, Europe and Japan, drawing a rebuke from United States allies.

China and United States moves to impose unilateral sanctions undermine and destabalise the WTO, he says.

USA restrictions will target China's technical industries, including aerospace, robotics, and auto engineering. "But I am concerned that these new tariffs will instead hurt American manufacturers, farmers, workers, and consumers".

"Not only do they steal our intellectual property, they keep our good companies out, and say the only way you're going to be able to sell your American products in China ... is if you come to China, make them there, and give us the techniques and intellectual property", he added.

"US-China trade tensions will be long-lasting", said Yifan Hu, regional chief investment officer and chief China economist at UBS Wealth Management told a briefing in Beijing.

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