China: Tit-for-tat tariffs will ‘destroy’ US-China trade

Soybean prices have fallen dramatically in recent weeks.
Daniel Acker  Bloomberg

Soybean prices have fallen dramatically in recent weeks. Daniel Acker Bloomberg

The detailing overnight of US President Donald Trump's already-threatened 10 per cent tariffs on an additional $200 billion of Chinese goods dampened hopes that Washington will eventually step back from the escalating row.

The threat of additional tariffs on $200 billion worth of goods "would mean that around half of Chinese exports of goods to the US would face significant USA punitive tariff measures", Rajiv Biswas, Asia Pacific Chief Economist at IHS Markit, said in a note.

The list is subject to a two-month public comment period before taking effect.

"For over a year, the Trump Administration has patiently urged China to stop its unfair practices, open its market, and engage in true market competition", Lighthizer said.

"The behavior of the U.S. is hurting China, hurting the world, and hurting itself", it said.

Farmer Terry Davidson walks through his soy fields July 6, 2018, in Harvard, Illinois, the same day China imposed retaliatory tariffs aimed at the United States soybean market.

Senate Finance Committee chair Orrin Hatch (R-Utah) also took aim at the announced list, saying it "appears reckless and is not a targeted approach".

China Daily said in an editorial that Beijing had to stand up to Washington.

At a forum in Beijing, a senior official accused the U.S. of "damaging the world economic order" and said it would "destroy" trade between the rival powers.

The prospect of a 10 percent tariff on Chinese furniture imports sent shares of online home store WayFair Inc down 2.9 percent, while shares of Restoration Hardware tumbled 4.3 percent.

China accused President Trump last week of starting "the biggest trade war in economic history" with his administration's original round of tariffs.

A Commerce Ministry statement said, "It is totally unacceptable for American side to publish a tariff list in a way that is accelerating and escalating".

LONDON - Global markets are getting hammered on Wednesday as the trade war between the Trump administration and China intensifies, while fears also rise that Trump could pull the U.S. out of North Atlantic Treaty Organisation.

This has raised concerns that China could retaliate with non-tariff trade measures.

Investors said trade war worries may slip to the background as investors begin to focus more closely on second-quarter earnings over the coming weeks.

Australia's dollar, often seen as a proxy for China's economic fortunes due to Australian raw materials exported there, was 1.09 percent lower. High-level talks between the two countries starting in May failed to deliver a breakthrough to head off a trade war. That's why Trump can slap tariffs on them just because he feels like it.

USA trade representative Robert Lighthizer announced that the United States was acting because China had not heeded previous warnings. "At the same time, China will report the US' unilateral behaviour to the World Trade Organization", reports China News.

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