Published: Sat, July 07, 2018
Money | By Armando Alvarado

China cancels US soybean purchases as trade war takes hold

China cancels US soybean purchases as trade war takes hold

U.S. President Donald Trump had threatened earlier that he would impose tariffs on an additional $200 billion in Chinese imports if Beijing retaliated with countermeasures.

The Trump administration contends that China has deployed predatory tactics in a push to overtake US technological dominance.

Washington-based think tank the Peterson Institute for International Economics (PIIE) expects United States tariffs on Chinese goods, which it says particularly target computers and electronics, to hurt multinationals more than China as well as other firms in Asia.

The clash with China comes as the Trump administration is also fighting over trade with American allies such as Canada and the European Union.

USA business groups, lawmakers on Capitol Hill and foreign leaders have pleaded with Trump to rethink his tariffs strategy, which has already led to billions in retaliatory duties from Mexico, Canada, the European Union and other countries as a result of the administration's duties on steel and aluminum imports that were first imposed in late March. Hardliners such as Peter Navarro, a trade policy adviser, says the United States is defending itself against an "aggressive" China. It will make - it is making already - American consumers pay more for the goods they buy. "They are a vital trading partner, and we need to continue to do business with China without the sting of these tariffs".

"We're here because President Trump says China is stealing our intellectual property", said Cohen, "We plan on imposing tariffs equivalent to what we believe was the harm caused to us by reason of intellectual property theft".

Oranges, the quintessential Florida product, are listed on a list of retaliatory tariffs published by the Chinese government.

There was no evidence of last-minute negotiations between U.S. and Chinese officials, business sources in Washington and Beijing said.

In 1900, tariffs accounted for about 30% of the total value of USA imports, as the country was trying to restrict imports and develop its young industrial sector.

Some economists warn that an all-out trade war would put the brakes on the USA economy by eroding business confidence, interrupting supply chains and increasing costs of imports to US companies and consumers. They are concerned trade disputes will prevent investment that supports economic growth.

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Instead, Safadi said Jordan is delivering aid to the displaced and has deployed field hospitals near the border. The agency believes that the number of displaced people is likely to grow as fighting in the region continues.

Association of Equipment Manufacturers President Dennis Slater warned that the back and forth between China and the United States would damage American manufacturing and lead to job losses.

US stocks have wobbled on trade frictions, but the S&P 500 Index remains roughly level from the start of the year.

The threat of a trade war has become a reality.

"These tariffs will do nothing to protect, but they will undermine the benefits of tax reform and drive up prices for a wide range of products as diverse as tool sets, batteries, remote controls, flash drives and thermostats", Shay said.

Hours after the statement was released, the General Administration of Customs of China publicly announced that 25 percent import tariffs had been imposed on equal value of American goods, ranging from soybeans to pork.

That would bring the total of targeted Chinese goods to $550 billion - more than the $506 billion in goods that China shipped to the United States past year.

Analysts at Bank of America Merrill Lynch forecast only a modest escalation in the US-China battle, adding: "However, we can't rule out a full-blown, recession-inducing "trade war".

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.

The United States and China slid into an unprecedented trade war on Friday.

The move is part of Mr Trump's protectionist agenda, which has undermined the free trade policies that have shaped the global exchange of goods in recent decades.

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