Published: Sat, July 07, 2018
Finance | By Gustavo Carr

China says the U.S. has started ‘the biggest trade war’ in history

China says the U.S. has started ‘the biggest trade war’ in history

China has said it would respond with tariffs on hundreds of USA goods, including top exports such as soybeans, sorghum and cotton, threatening US farmers in states that backed Trump in the 2016 USA election, such as Texas and Iowa.

U.S. tariffs on $34bn in Chinese imports took effect as a deadline passed on Friday, and with Beijing having vowed to respond immediately in kind, the world's two biggest economies took a high-stakes turn towards all-out trade conflict.

China has said it will not "fire the first shot" in a trade war with the United States, but its customs agency made clear on Thursday that Chinese tariffs on American goods would take effect immediately after US duties on Chinese goods are put in place.

The commerce ministry on Friday criticised Washington for "trade bullying" following the tariff hike that took effect at noon Beijing time in a spiraling dispute over technology policy that companies worry could chill global economic growth.

White House spokeswoman Sarah Huckabee Sanders, responding earlier this week to a question about how the winning the trade battle: "The President is focused not on the short term but on the long term, and he wants to make sure that we're doing things that help protect American workers and protect American industry".

"China is the largest trading partner with the Port of Oakland and our exporters and importers are concerned about the potential effect of a trade war", said Mike Zampa, the Port of Oakland Communications Director.

Trump has railed against Beijing for intellectual property theft and barriers to entry for USA businesses and a $375 billion United States trade deficit with China.

Reuters/Jason LeeChina's President Xi Jinping speaks to media in front U.S. and Chinese national flags during a joint news conference with U.S. President Barack Obama (not pictured) at the Great Hall of the People in Beijing.

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Trump said in March that trade wars are good and easy to win.

"We will continue to assess the potential impact of the USA -initiated trade war on companies and will help companies mitigate possible shocks". Chinese shares slipped further from early deals and pulled Asian markets down, while the yuan currency also weakened.

'China will not bow down in the face of threats and blackmail and will not falter from its determination to defend free trade and the multilateral system'. "We can expect job losses and a decline in investor and consumer confidence", longtime Beijing-based attorney James Zimmerman tells NPR's Rob Schmitz. The products, all sold on Chinese e-commerce platforms, ranged from pet food to mixed nuts and whiskey.

"This continued escalation poses a serious threat to growth and recovery in all countries, and we are beginning to see this reflected in some forward-looking indicators", WTO Director General Roberto Azevedo said in a statement. There did not appear to be any direct instructions to hold up cargoes, but some customs departments were waiting for official guidance on imposing added tariffs, the sources said.

In the countdown to midnight, Chinese State media slammed the White House, and accused the US of acting like "a gang of hoodlums,"trying to "shake down" other countries - especially China. To put it simply, the opening fire on the entire world, including itself", Gao said".

In a fresh sign of industry´s unease, a business survey on Thursday again showed the USA services sector was already experiencing supply chain interruptions and rising costs in anticipation of heightened trade restrictions.

Mr Trump said: "You have another 16 [billion dollars] in two weeks, and then, as you know, we have $200bn in abeyance and then after the $200bn, we have $300bn in abeyance. OK?"

US President Donald Trump told reporters on Thursday that US tariffs on an additional $16bn in Chinese goods are set to take effect in two weeks.

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