Markets

Trump threatens China with more than $500bn in U.S. trade tariffs

Trump threatens China with more than $500bn in U.S. trade tariffs

A China central bank adviser said the planned United States import tariffs on $50 billion worth of Chinese goods - $34 billion plus a planned follow-on list worth $16 billion - will cut China's economic growth by 0.2 percentage points, although the overall impact would be limited, the official Xinhua news agency reported Friday.

China has promised to immediately hit back with tariffs of "equal scale, equal intensity" on American soybeans, corn, wheat, rice, beef, and poultry.

"It is troubling that the administration continues to assume that the imposition of tariffs will convince China to resolve complex trade issues, and irresponsible to downplay the impact on American workers and businesses", said Josh Kallmer, executive vice president for policy with the Information Technology Industry Council, which represents companies like Amazon and Intel. Trump has added to the tension by threatening new tariffs on cars.

The United States was set to impose tariffs on $34 billion of Chinese imports from 0401 GMT on Friday, as Trump warned it may ultimately target over $500 billion worth of Chinese goods, or roughly the total amount that the United States imported from China past year. The tariffs mark some of the first material movements toward a trade war between the world's largest economies.

The Washington Post reported on Wednesday that United States companies had already felt Beijing's sting "in the form of stalled product approvals, worker visas and licensing applications".

American farmers and manufacturers, in particular, seem poised to bear the brunt of the effects of the U.S. "These tariffs could mean the difference between a profit and a loss for an entire year's worth of work out in the field, and that's only in the near term".

What do China and Russian Federation say? The Dow Jones industrial average has shed almost 1,000 points since June 11.

Publishing forecasts by the UK's central bank, Carney warned that the American economy would suffer a 2.5% drop in GDP as a result of falling trade volumes alone over three years, should the White House increase United States import tariffs by about 10 percentage points on all of its trading partners.

Chinese President Xi Jinping (left) and US President Donald Trump in Florida previous year.




The Chinese currency, the yuan, has dropped 3.5 percent against the US dollar over the past month, giving Chinese companies a price edge over their USA competition.

"Trade war is never a solution", said Chinese Premier Li Keqiang.

But despite the rhetoric, today's tariffs could be the opening skirmishes in the war, as Trump has vowed to impose duties on as much as US$450 billion (RM1.8 trillion) in Chinese goods, the vast majority of imports.

If you like Chick-fil-A sandwiches, for instance, you may feel the impact of the tariffs. Investors have pulled money out of emerging markets and European equities more quickly over the last two months than in 2016, Bank of America Merrill Lynch strategists said on Friday in a weekly note.

He said the companies could eat the cost for consumers, but that could lead to less jobs.

The tariffs were going to target products used for robotics, information technology, communication technology and aerospace, Trump said.

Washington increased tariffs as a first step in what could become an accelerating series of tariffs in the coming weeks. Over the past year, their price has surged more than 8 percent, compared with a slight drop in overall appliance prices.

"If what the United States wants is to escalate a trade war with China, then so be it".

Chinese companies have started turning away from US soybean suppliers and looking to other sources for agricultural products.