Trump Tariffs Against China Take Effect

US China

Earlier on Friday, President Donald Trump followed through with tariffs on $34 billion worth of Chinese products early Friday, prompting in-kind retaliation from Beijing.

The US trade deficit in goods with China now stands at about $375bn.

Asked on Thursday whether China would target US-funded businesses in China to counter USA restrictions on Chinese products, Chinese Ministry of Commerce spokesman Gao Feng said it was not part of Beijing's plan and, instead, China might compensate foreign businesses for losses from a trade war.

Beijing has also offered the EU an alliance in a trade war with the United States, claiming that "China and European countries are natural partners".

"A trade war is the last thing we want to see, because we said many times that no one will benefit from a trade war", said Chinese foreign ministry spokesman Lu Kang.

"The Trump administration is behaving like a gang of hoodlums with its shakedown of other countries, particularly China", said an English-language article in the China Daily. But American companies that depend on Chinese products are expected to feel the pinch, given the tariffs focus heavily on the kind of intermediate inputs and capital equipment that businesses purchase and ultimately sell both in the United States and overseas.

Still, Chinese investors and companies were anxious.

Japan's main stock index, the Nikkei 225, gained 1.1 per cent while the Shanghai Composite Index added 0.5 per cent. Hong Kong's Hang Seng also rose 0.5 per cent.

Many other nations have industrialised but then stagnated: low wages enable cheap manufacturing, and so cheap exports.

Washington increased tariffs at 12:01 a.m.

There was no evidence of last-minute negotiations between United States and Chinese officials, business sources in Washington and Beijing said.

And enduring the pinch isn't going to pay off. Protectionism has historically proven to be destructive for the global economy and won't achieve what the Trump administration is trying to accomplish, said Hsu.

Throughout the escalating conflict, China has sought to take the high road, positioning itself as a champion of free trade, but state media ramped-up criticism of Trump on Friday.

"If the United States is determined to escalate conflicts with China then so be it", the newspaper said in an editorial. The first round of tariffs on China take effect on Friday, and Trump has threatened more.

He described the potential escalation to reporters aboard Air Force One: "Thirty-four, and then you have another 16 in two weeks and then, as you know, we have 200 billion in abeyance and then after the 200 billion we have 300 billion in abeyance. OK?" "So we have 50 plus 200 plus nearly 300".

Chinese Commerce Ministry spokesman Gao Feng said that the proposed USA tariffs would hit many American and foreign companies operating in China and disrupt their supplies of components and assembly work.

Syracuse University economics professor Mary Lovely and researcher Yang Liang found 87% of electronics products to be levied by USA tariffs came from multinationals and joint ventures rather than Chinese firms. Requests for comment went unanswered at the U.S. Treasury, USTR and the U.S. Commerce Department.

But then wages rise, making exports more expensive, and the country gets stuck in what's known as the "middle income trap".

Data from the US Census Bureau show how the US economy has been heavily dependent on imports.

"The reciprocal tariffs on US$50bn of goods in both directions will have minimal impact in China", Andy Rothman, an investment strategist at Matthews Asia, wrote in a blog this week.

When the clock stuck midnight, US tariffs on $34 billion in Chinese imports took effect. "The impact on the U.S. political environment is, however, likely to be far greater", he said. The implementation of new US duties on these products will impact companies from outside China, including the U.S.

"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.

"But the tariffs will bring double-lose results".

A member of China's central bank monetary policy committee, Ma Jun, said Friday that the first punches will have a "limited impact" on the Chinese economy.

"The Coming Collapse of China" author Gordon Chang on the USA and Chinese tariffs taking effect on Friday.

Related news:

Hot News

isis-killer-beheading-video-story-top Samsung Galaxy S10 might feature triple-camera setup
Jul 07, 2018 - 03:04
It is said that the phone would be held shut by magnets and that the display would turn on automatically when the hinge is open. Samsungs's foldable flagship Galaxy X phone is expected to go official in the initial months of 2019 alongside the Galaxy S10.

isis-killer-beheading-video-story-top F1: Mercedes British GP practice Verstappen brought to a halt
Jul 07, 2018 - 02:51
Hamilton also revealed that he is planning to travel to Russian Federation to see the World Cup final next weekend. I don't see the necessity to decide every time. "For a change it seems like a good Friday, but I hope you're right.

isis-killer-beheading-video-story-top Which of the rumored new iPhone colors appeals to you most?
Jul 07, 2018 - 02:45
Reputable analyst Ming-Chi Kuo is reporting that Apple's 2018 iPhones will be available in a variety of colors . As it turns out, Apple's iPhone lineup could be quite a bit more colorful than it has been in recent years.

isis-killer-beheading-video-story-top Brazil and France target World Cup semi-finals
Jul 07, 2018 - 02:06
France then doubled their advantage after half-time when Fernando Muslera completely misjudged a speculative shot from Griezmann. There were also warm words for Uruguay's efforts from Griezmann, who was named man of the match .

isis-killer-beheading-video-story-top How do the World Cup quarter-finalists compare?
Jul 05, 2018 - 04:48
If the Three Lions had pipped Belgium to top spot in Group G they could have played the Samba Boys in the quarter-finals. England have beaten Colombia on penalties. "They have shown it so many times now".

isis-killer-beheading-video-story-top National Basketball Association free agency rumors: Lakers meeting with Clint Capela
Jul 05, 2018 - 04:24
Looking forward, Paul will continue to provide tenacious on-ball defense and playmaking starting at point guard for the Rockets. The Rockets had their best regular season in franchise history with Paul and NBA MVP James Harden leading the way.

isis-killer-beheading-video-story-top Fellaini does what Ronaldo, Messi or Neymar can't
Jul 05, 2018 - 03:49
Mexico threatened at times but their World Cup challenge ended at the first knockout stage for the seventh consecutive tournament. Neymar , 26, reacted strongly to an incident in which Mexcio's Miguel Layun seemed to stand on his ankle.

isis-killer-beheading-video-story-top Thai football team found alive in cave after nine days
Jul 04, 2018 - 01:32
Joining the British are other experts from around the world and teams from the U.S., Australia , China and elsewhere. Several fissures have been found and teams have explored some, although so far, none lead to the trapped boys.

isis-killer-beheading-video-story-top Hume: GOP Sens. Collins, Murkowski Key to Success of Trump SCOTUS Pick
Jul 04, 2018 - 01:21
Collins has told CNN she couldn't support a nominee who "demonstrated hostility" toward Roe v. John McCain, R-Ariz., is out as he battles brain cancer.

isis-killer-beheading-video-story-top Washington Wizards Could Be Landing Spot for Dwight Howard
Jul 04, 2018 - 01:19
But with James out of town, it looks like Love will be the topic of serious trade talk in the coming days. At the moment, there's a good chance we won't see LeBron James in the Finals this year.

isis-killer-beheading-video-story-top Gracious in defeat, Japan leave Russia World Cup with pride
Jul 04, 2018 - 01:00
I have more experience, definitely. "We are going to rest really well and going to really try to win that match". In Belgium vs Japan match, the former appears to be the clear favourite.

isis-killer-beheading-video-story-top Software Developers are Scanning the Inboxes of Gmail Users
Jul 04, 2018 - 00:51
The revelation comes at a bad time for Google and Gmail, the world's largest email service with 1.4 billion users. It may do some internal testing to make sure of this, as well.

isis-killer-beheading-video-story-top Heroic puppy bitten by rattlesnake while protecting owner
Jul 03, 2018 - 02:06
Her puppy, Todd, jumped in front of her leg to ensure she wouldn't get bit. "But my hero of a puppy, Todd, saved me". Godwin sought medical treatment for Todd immediately, and she said the courageous pup is expected to fully recover.

isis-killer-beheading-video-story-top Capital Gazette Leaves Its Editorial Section Blank Day After Shooting
Jul 03, 2018 - 01:58
Ramos, is charged with five counts of first-degree murder in one of the deadliest attacks on journalists in USA history. The account went dormant from January 2016 until 2.37pm Thursday when a message appeared: "F-- you, leave me alone".

isis-killer-beheading-video-story-top Molinari claims first PGA Tour title in runaway as Woods fourth
Jul 03, 2018 - 01:52
After spending years seemingly willing the ball in the hole when it mattered most, Woods has lacked that clutch trait this season. Woods will resume his quest for a 15th major championship in three weeks when The Open Championship returns to Carnoustie.