Charting the US-China trade battle

Charting the US-China trade battle

The Chinese government says it is imposing a 25 percent levy on shipments on soybeans and other agricultural goods in retaliation for USA tariffs on Chinese technology.

Accusing China of conducting "unfair" trade practices, Trump has pledged to protect US intellectual property, stop noneconomic transfers of industrially significant technology and intellectual property to China, and increase access to the Chinese market for American products.

Beijing insists it's the injured party.

It added that instead of "serving the interests of United States companies and people, the move will prove to be counter-productive and damaging".

It accused the United States of "typical trade bullying".

The United States will also impose 25 percent tariffs on another $16 billion in Chinese exports later this summer, something Beijing also said will not go unpunished.

"The bottom for A-shares is nowhere in sight", said Samuel Chien, partner of Shanghai BoomTrend Investment Management Co.

A China central bank adviser said the planned USA import tariffs on $50 billion worth of Chinese goods - $34 billion plus a planned follow-on list worth $16 billion - will cut China's economic growth by 0.2 percentage points, the official Xinhua news agency reported Friday.

Economists say that if the back-and-forth stops there, the overall impact on both economies will be minimal even though some industries will suffer.

"Following a long period of stagnation, we see things finally moving again", he said, mentioning Beijing's further opening of its financial services and automobile industries to foreign investors. On Thursday, he suggested the possibility of tariffs on nearly $500 billion more of Chinese goods. The EU has said it will impose its own tariffs of about $US300 billion on U.S. imports if he follows through. That hands Chinese President Xi Jinping room to impose penalties such as customs delays, tax audits and increased regulatory scrutiny if Trump delivers on his threat of bigger duties on Chinese trade. Some economists question the accuracy of the official figures, yet the US Census Bureau shows America bought $376bn more of Chinese goods than the total value of all US goods sold in the Asian country a year ago.

"We urge the two governments to come back to the negotiation table with the aim of having productive discussions based on achieving results - focused on fairness and reciprocal treatment - instead of escalating the current situation", said Zarit of the American Chamber of Commerce.

The administration started imposing tariffs at 12:01 a.m.

Trump argues that his approach will force other countries to trade more fairly, reducing America's $552 billion trade deficit and prompting employers to return to America. USA tariffs on steel and aluminum imports have provoked retaliatory measures against billions of dollars of American exports. India's own experiences with the Great Wall of Chinese non-tariff trade barriers bear testimony to this fact.

"I don't see this ending well", she said.

The impact of the first round of tariffs on $34 billion in Chinese goods will be "quite small", said Ethan Harris, head of global economic research at Bank of America Merrill Lynch.

The world's two largest economies, the United States and China, are locked in a worsening trade battle that could have unexpected side effects on the global economy. The Dow Jones Industrial Average shed 1,000 points from a high in mid-June, while the S&P 500 has also retreated notably since concerns about a trade war started to loom.

U.S. tariffs on $34bn (£25.7bn) of Chinese goods have come into effect.

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