Canada 'caught in the crossfire' of US-China trade dispute

US to impose tariffs on $200 billion Chinese imports

US to impose tariffs on $200 billion Chinese imports

However, China has vowed to match every tariff tit-for-tat, and will likely follow through.

It also approved a huge new wholly-owned Shanghai factory for U.S. electric vehicle maker Tesla Inc, and a $2.3 billion joint venture organic light-emitting diode (OLED) plant to be built by South Korea's LG Display Co Ltd.

China expressed shock Wednesday at the Trump administration's decision to prepare 10-percent tariffs on another $200 billion of Chinese imports covering thousands of products, the latest move in an escalating trade war between the world's two largest economies.

US financial analysts said Trump appeared to believe there was a political benefit to waging a trade war, although that could change quickly amid economic fallout. Ryan reiterated his opposition to the president's tariffs Wednesday, saying they "are not the right way to go".

The recent investment announcements came as Premier Li Keqiang this week visited Germany. The two countries signed commercial accords worth €20 billion (US$23.5 billion), including the BASF agreement.

The EU and China will hold an economic summit meeting in Beijing next week with reports suggesting that China is pressing the EU to issue a strong statement against Trump's trade policies. "Consumers, businesses and the American jobs dependent on trade, are left in the crosshairs of an escalating global trade war", said Hun Quach, the head of worldwide trade policy for the group. Chinese officials insist there is no link, and that it will open up at its own pace. Rising costs are also frustrating to foreign manufacturers in China.

Guan Tao, a senior researcher at the Beijing-based think tank China Finance 40 Forum, said this will bring negative short-term sentiment to the financial market, but that it should not be overestimated. "It seriously jeopardizes the global industrial chain, ... hinders the pace of global economic recovery, triggers global market turmoil and will affect more innocent multinational companies, general companies and consumers". Prominent academics and some government officials have begun to question if China's slowing, trade-dependent economy can withstand a sustained attack from Trump, which has already weighed heavily on stock prices. Futures for soybeans, a target for China's retaliation, have fallen about 16 percent since the end of May, as the trade conflict was heating up.

The dispute between China and the USA comes on top of Washington's confrontation with other allies and major trading partners including Canada, Mexico and the European Union, after it imposed steep tariffs on their steel and aluminum. But one source at a top Chinese news site told Reuters that the new rules are "the most strict yet".

The US Chamber of Commerce has supported Trump's domestic tax cuts and efforts to reduce regulation of businesses, but it has been critical of Trump's aggressive tariff policies.

"Tariffs are biting. The Chinese are less confident internally than externally". They criticize Trump's tactics but share US complaints about Beijing's industrial policies. A Bank of America survey last week reported that investor thinking had shifted since the spring, and the market saw potential dollar-positive implications from a trade war, as the United States would be better equipped to weather a slowdown in trade than other major economies.

Trump has been following through on pledges he made during his presidential campaign to get tough on China, which he accuses of unfair trade practices including theft of intellectual property and forced technology transfer that have led to a $375 billion USA trade deficit with China.

"By committing themselves to further openness".

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