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China Says U.S. Has Started ‘Biggest Trade War’ in History

07 July 2018

US President Donald Trump discussed the trade war on Thursday with journalists who flew with him to Montana for a campaign rally.

The Shanghai Composite Index fell about 0.3 percent after flirting with two-year lows.

"As for possible impacts on businesses from the trade war initiated by the United States, we will keep assessing the situation and make efforts to help [foreign] businesses to mitigate any possible impacts", Gao said.

But Trump has said his administration will respond to retaliation from Beijing with much bigger waves of tariffs, raising the prospect of worsening tit-for-tat reprisals.

China's central banker said Trump's promised tariffs of 25% on $50bn of Chinese goods - Friday's $34bn to be followed by $16bn in a few weeks - would shave 0.2 percentage points off of China's GDP and the "overall impact would be limited", according to Xinhua.

As the world's most developed nation and the rule-maker of the current global governing system, there is "astounding absurdity" in the US complaining that it's been bullied in trade, the People's Daily, the flagship newspaper of the Communist Party of China, said in a Chinese language commentary on Friday.

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"Trade disruption is the greatest threat to global growth", said Dec Mullarkey, managing director of investment strategies at Sun Life Investment Management. "Imposing high tariffs definitely hurts China badly, but we will not be beaten down", she said.

Notably, after Europe announced it would tax quintessentially American exports like orange juice, peanut butter and Harley-Davidson motorcycles, Harley-Davidson said it would move production of its Europe-bound bikes overseas to avoid the tariffs.

"There are no winners in a trade war", said the chamber's chairman, William Zarit, in a statement. "All we've accomplished is getting more trade barriers".

China will also start collecting a 25 percent levy on $US34b of United States goods such as agricultural products and cars. Asian equities wobbled but also managed to end up.

China's commerce ministry said it had lodged a new complaint with the World Trade Organization (WTO). He added that for now, "He's called the bluff of other countries that have basically been abusing. our workers for a long time".

Reuters news agency reported that as of Friday morning, when tariffs took effect, some major Chinese ports had delayed clearing goods from the US. The products, all sold on Chinese e-commerce platforms, ranged from pet food to mixed nuts and whiskey. "Manufacturers in the United States succeed when the rules are clear and fair and markets are open".

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Minutes after the U.S. put its long-threatened duties into effect just after midnight on Friday morning, a spokesperson for China's ministry of commerce said it would be matching them dollar-for-dollar.

Trump is also sparring with the European Union over his threat to tax auto imports and with Canada and Mexico over his push to rewrite the North American trade pact.

China's commerce ministry called the USA actions "a violation of world trade rules" and said that it had "initiated the largest-scale trade war in economic history".

The Trump administration is confronting Beijing over development tactics it says include stealing or pressuring foreign companies to hand over technology.

Beijing vowed to take "necessary countermeasures" after the USA imposed 25 percent duties on about $34 billion in Chinese machinery, electronics and high-tech equipment, including autos, computer hard drives and LEDs.

This trade war will hit American agricultural exports such as pork and soybean hard, but if President Trump ups the ante, products like televisions and other household goods could also be hit, meaning consumers will face higher prices, Matthew Shay, president of the National Retail Federation, told the Associated Press.

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The first round targets Chinese industrial goods, not consumer products, in an attempt to limit the impact on US households, but companies that rely on Chinese-made machinery or components may eventually have to pass along increased costs to customers.

China Says U.S. Has Started ‘Biggest Trade War’ in History