Published: Wed, June 20, 2018
Money | By Armando Alvarado

Donald Trump ratchets up China trade dispute with new tariffs

Donald Trump ratchets up China trade dispute with new tariffs

Are US and China on the brink of a trade war?

President Trump's threat to impose tariffs on an additional $200 billion in Chinese goods, followed by Beijing's swift vow to retaliate, has jangled investor nerves and elicited concern from a range of industries.

The needs of China and the U.S. are not contradictory, given that the USA wishes China to further open its market access while China focuses on upgrading its industrial structure and improving its position in the global value chain, said Sang Baichuan, director of the Institute of International Business at the University of International Business and Economics in Beijing.

China might be unable to match the USA tariffs because it imports much less from the United States - $130 billion in goods past year, compared with Chinese exports to the United States of $505.5 billion.

"If they thought that they could buy us off cheap with a few extra products sold and allow them to continue to steal our intellectual property and crown jewels, that was a miscalculation". "The United States will no longer be taken advantage of on trade by China and other countries in the world".

The trade dispute between the world's two largest economies escalated after Trump said in a statement late Monday that he had requested the United States Trade Representative to identify $200 billion worth of Chinese goods for additional tariffs at a rate of 10 percent.

The Australian dollar sank to a one-year low of A$ 0.7391 as the U.S.

The proposed measures caused upset on global stock markets on Tuesday, initially weakening both the USA dollar and the Chinese yuan.

Wall Street has viewed the escalating trade tensions with wariness, fearful they could strangle the economic growth achieved during Trump's watch. USA bond yields fell in a flight to safety. "The rising risk of a disruptive trade conflict makes a bad situation tentatively worse". He notes that the USA imports more from China than China imports from the U.S.

US business groups said members were bracing for a backlash affecting all American firms in China, not just in sectors facing tariffs.

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The Footware Distributors and Retailers of America, though, rebuked Trump for his comment in a statement.

Being tough with China plays well with many of President Trump's supporters, actual and potential, at a time when he is looking ahead to the Congressional elections in November. "But the short-term damage to the markets and the impact on the economy has me concerned".

"Dairy", Trump said. "Dairy, 275 per cent tariff".

The ministry's description of a combination of "quantitative and quality measures" under consideration indicates that the trade war will enter a new stage, experts said. That sum approaches the roughly $500 billion in total annual Chinese exports to the United States.

Of note, the report also says there is a risk that Beijing would "seek to manipulate or pressure" any of the more than 300,000 Chinese nationals annually attending US universities or working at important American institutions.

Big industrial companies and chemical makers are hard hit.

Beijing has mounted campaigns against Japanese and South Korean companies in the past after diplomatic disputes.

Fears of a trade war that could harm global growth spurred sales of the Chinese yuan, which fell to a five-month trough in the offshore market, as well as commodity-linked and emerging market currencies.

"It's clear that China does have much more to lose", he told reporters, noting that China exported more than $500 billion to the USA past year, far more than the $130 billion it imported from the United States.

China calls President Donald Trump's threat to slap more tariffs on Chinese exports to the U.S.

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